California may thaw financing freeze; Wake County, N.C., prices $502.3 million in G.O. bonds

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, March 17 - California may be close to removing a block on financing that has delayed or stopped 5,300 bond-funded infrastructure projects in the state, according to a statement from the state treasurer's office.

Bill Lockyer, the state's treasurer, said Tuesday he will recommend the Pooled Money Investment Board conditionally approve up to $500 million in financing from the State Pooled Money Investment Account. The move would be contingent upon the completion of a $4 billion general obligation bond sale, which is scheduled for March 23 to March 25.

"California will be back in the bond market after a nine-month absence, and we're confident investors will greet us warmly," said Lockyer in a statement.

"I believe a successful $4 billion deal should allow us to start providing relief from the freeze that has harmed our workers, businesses, communities and economy. But it will take time to return our infrastructure financing system to full health."

The state froze bond financings in June 2008 after issuing $1.5 billion in G.O. bonds.

Wake County prices $502 million

In primary market action, Wake County in North Carolina sold $502.365 million in series 2009 G.O. and refunding bonds, said a sellside source familiar with the deal.

The sale included $135 million in series 2009A G.O. public improvement bonds due 2010 to 2026, $300 million in series 2009B G.O. public improvement bonds due 2010 to 2025 and $67.365 million in series 2009C G.O. refunding bonds due 2010 to 2015.

Merrill Lynch & Co. was the winning bidder for the 2009A and 2009B bonds, with a 3.81% true interest cost. BB&T Capital Markets Inc. won the $67.365 million portion with a 2.16% TIC.

Proceeds will be used to construct, expand and renovate public school, library and community college facilities; to refinance $300 million in series 2008 G.O. BANs; and to refund the county's series 1998 G.O. public improvement bonds with serials due 2010 to 2015.

New York City TFA upsizes to $220 million

In other primary news, the New York City Transitional Finance Agency priced $220 million tax-exempt senior-lien refunding bonds (Aa1/AA+/AAA), according to an authority press release.

Yields ranged from 1.15% to 4.15% for the bonds, which were initially expected at $200 million. Maturities range from 2010 to 2019.

Barclays Capital Inc. acted as lead underwriter for the negotiated bonds.

The initial retail period brought $125 million of interest.

Elsewhere, the Rhode Island Health and Educational Building Corp. priced $123.765 million in series 2009A hospital financing revenue bonds for Lifespan Obligated Group, an insider said.

The full terms were not immediately available Tuesday.

Morgan Stanley & Co. Inc. was the lead manager for the bonds, which are due 2030 and 2039.

Proceeds will be used to acquire, construct, renovate, expand and equip hospital and health care facilities.

Milwaukee to bring $400 million

Moving to upcoming sales, Milwaukee County in Wisconsin announced plans Tuesday to price $400 million in series 2009 pension notes Wednesday, according to a preliminary official statement.

The sale includes $265 million in series 2009A taxable G.O. pension promissory notes and $135 million in series 2009B taxable pension notes.

The notes (Aa3/AA/AA) are due 2010 to 2028 and will be sold on a negotiated basis with J.P. Morgan Securities Inc. as the senior manager.

Proceeds will be used to pay annual pension costs.

Rhode Island offerings on tap

Also on Wednesday, the Rhode Island Economic Development Corp. plans to price its previously announced $179.125 million in series 2009 grant anticipation and revenue bonds for the Rhode Island Department of Transportation, a sellside source said Tuesday.

The corporation conducted a retail order period Tuesday, but an institutional order period will be held Wednesday.

The sale includes $167.82 million in series 2009A grant anticipation bonds and $11.305 million in series 2009A motor fuel tax revenue bonds.

Citigroup Global Markets Inc. is the senior manager.

The grant anticipation bonds are due 2010 to 2021, and the motor fuel bonds are due 2010 to 2027.

Proceeds will fund transportation projects.

Northwest Hospital sale

Also coming up, the Illinois Finance Authority is set to sell $455.975 million in series 2009 revenue bonds for Northwestern Memorial Hospital, according to a preliminary official statement. The sale is expected for later this month, a sellside source told Prospect News Tuesday.

The bonds (Aa2/AA+/) will be sold on a negotiated basis with J.P. Morgan Securities Inc. as the senior manager.

The sale includes $352.525 million in series 2009A bonds and $103.45 million in series 2009B bonds.

Proceeds will be used to reimburse the hospital for costs related to constructing and renovating health care facilities. The rest will be used to refund the hospital's outstanding 1995, 2004B, 2007B and 2008B bonds.

Las Vegas plans to price $105 million in series 2009 limited tax G.O. performing center revenue bonds on March 24, according to a preliminary official statement.

The bonds (/AA/) will be sold on a competitive basis with Nevada State Bank Public Finance as the financial adviser.

The bonds are due 2012 to 2039.

Proceeds will be used to construct, equip and maintain a performing arts center in the city.

Secondary weakens

Moving to the secondary market, conditions weakened amid pressure from an overloaded primary market, a trader said.

"We're up 4, 5 basis points, especially long," said one trader.

"It's been a tough day. We were getting hit pretty hard come the afternoon."

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