Knoxville knocks down sale of wastewater revenue bonds; Harvard to sell $600 million Thursday

By Sheri Kasprzak

New York, Dec. 8 - Issuers were lining up at the door Monday with upcoming sales, including several competitive offerings in a shaky market.

Meanwhile, things weren't nearly so active in the secondary market with one trader calling it "a really boring day."

Some issuers on Monday were rethinking their competitive offerings, including the City of Knoxville, Tenn., which indefinitely put off its $40 million sale of series 2008Y electric system revenue bonds and slashed the size of its $75 million sale of series 2008 wastewater system revenue bonds to $45 million.

Both bonds were set to price competitively Tuesday, but now only the reduced wastewater offering will price.

The issuer did not immediately return calls late Monday for comment on the decision to delay the electric bonds and reduce the wastewater bonds.

The bonds will be sold competitively with Morgan Keegan & Co. as the financial adviser.

Several large offerings are expected to price competitively this week, including a long-awaited, $300 million sale of general obligation bonds from the Commonwealth of Pennsylvania, a $350 million sale of G.O.s from Miami-Dade County in Florida, $257.745 million in light and power revenue refunding bonds from the City of Seattle and $300 million in tax and revenue anticipation notes from the Colorado Education Loan Program.

"It's a pretty packed market," one sellside source said.

"I'm not sure if everything that's planned is actually going to price. I think a lot of issuers are going to at least test the market and see what they can get. Some of these might not get done until next year, just because there's such a concentration of offerings right now. Only so many investors are in the market at one time and there's just this push to get so much out there before the year ends."

Harvard sale ahead

Among those issuers pushing their deals in the coming week is the Massachusetts Health and Educational Facilities Authority, which is scheduled to price $600 million in series 2009A revenue bonds for Harvard University Thursday, said a calendar of upcoming sales.

The bonds (Aaa/AAA/) will be sold through senior manager J.P. Morgan Securities Inc.

Proceeds will be used to repay the university's outstanding commercial paper notes and pay for other corporate expenses, including the termination of an interest rate swap agreement.

Michigan G.O. notes

Also ahead, the State of Michigan is expected to sell $500 million in series 2008B G.O. notes at some point during the week, said a sales calendar.

The notes (MIG 1) will be sold through lead manager Goldman, Sachs & Co.

The notes are due Sept. 30, 2009, and proceeds will be used for current expenses.

In other upcoming deals for the week, the Colorado Education Loan Program will price $300 million in series 2008B tax and revenue anticipation notes Thursday, said a preliminary official statement.

The notes, due Aug. 7, 2009, will be sold on a competitive basis with RBC Capital Markets as the financial adviser.

Proceeds from the deal will be used for making interest-free loans to Colorado school districts to alleviate general fund cash flow deficits.

Chicago deal to price

The City of Chicago is expected to bring its previously announced $590.94 million series 2008 G.O. bonds to market Wednesday, according to a calendar of upcoming deals.

The bonds (Aa3) will be sold on a negotiated basis with William Blair & Co. as the senior manager. Proceeds will be used for infrastructure improvements and the demolition of hazardous, vacant or dilapidated buildings.

Moving south, the Municipal Gas Authority of Georgia plans to sell $105 million in gas revenue bonds either Tuesday or Wednesday, Chris Howell, the authority's director of finance, said on Monday. The exact pricing date, Howell said, will depend upon market conditions.

The bonds will be sold on a negotiated basis with Wachovia Bank as the lead manager.

The sale includes $50 million in series D bonds, which are due Dec. 16, 2009, and $55 million in series E bonds, which are due Dec. 16, 2009.

Proceeds from the D bonds will be used to provide funds to Public Gas Partners, Inc. for the development of some gas reserves. Proceeds from the E bonds will be used for refunding all of the authority's outstanding Portfolio III Project bonds.

Nassau County's competitive deal

Looking to upcoming deals, Nassau County in New York is scheduled to sell $132 million in series 2008 G.O. tax anticipation notes on Dec. 15, said a preliminary official statement.

The sale includes $85 million in series 2008A TANs and $47 million in series 2008B TANs. The 2008A notes are due Sept. 30, 2009, and the 2008B notes are due Oct. 30, 2009.

The offering will be conducted on a competitive basis with Public Financial Management as the financial adviser.

Proceeds will be used for the payment of general expenses ahead of the collection of some taxes by the county.

Secondary market 'boring'

Moving to secondary market activity Monday, traders agreed that it was slow-going and the tone of the market was down.

"It is a really boring day," said one trader reached in the afternoon.

"There's not much trading out there. We're off, but not as down as we were this morning. I think things have improved a little since this morning."

Another trader agreed.

"It's slow," he said. "Tone looks off this afternoon."

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