Illinois sells $1.2 billion shot-term G.O.s at 2.2% TIC; auction-rate conversions, bids continue

By Sheri Kasprzak

New York, April 17 - Illinois headed up a pricing action on Thursday as issuers continued to convert and bid on their auction-rate securities.

The Illinois bonds priced $1.2 billion of general obligation certificates competitively with a 2.2% true interest cost.

The series April 2008 certificates (MIG 1/SP-1+/S1+) are due May 23, 2008 and June 17, 2008.

"We allowed bidders to bid on individual maturities," said Phil Culpepper, debt manager for the state.

The certificates due May 23 priced in a $900 million tranche with a 2.15% true interest cost, he said. Citigroup Global Markets was the successful bidder with a 3% coupon to yield 2.13%, he said.

The $300 million certificates due June 17 priced with a 2.5% true interest cost.

Lehman Brothers was the successful bidder with a 3% coupon to yield 2.49%, Culpepper said.

Proceeds will be used to provide mid-fiscal year liquidity to the state's general fund and hospital provider fund for inpatient and outpatient payments to hospitals in the state.

"We were very pleased with the turnout for the transaction," Culpepper said. "We had nine bidders on one transaction and seven on the other. We have a good turnout from all the usual large investment banks, but we were also notified that some minority firms partnered up in some of the transactions."

Illinois also expects to price $125 million general obligation bonds in a competitive sale on April 23, the issuer said Thursday.

The bonds will price with a 25-year level principal, said Phil Culpepper, debt manager for the state.

Oglethorpe Power converts bonds

Moving back to auction-rate news, the Oglethorpe Power Corp. of Georgia successfully converted $133.55 million in series 2006 pollution control revenue bonds, according to a filing Thursday with the Securities and Exchange Commission.

The 4.625% bonds were converted to a term-rate mode from an auction-rate mode, the notice said.

The bonds have bullet maturities in 2036 and 2037 and were first sold for the Development Authority of Burke County and the Development Authority of Monroe County on Oct. 24, 2006.

Meanwhile Conway Hospital intends to bid on $50 million hospital revenue bonds in the April 23 auction, according to a notice released Thursday.

The series 2007 bonds priced through the South Carolina Jobs-Economic Development Authority.

Wachovia Securities is the broker-dealer.

The bonds received a high bid of 3.99% and a low bid of 1.8% in the last auction held Wednesday.

Cold Spring Harbor Laboratory in New York plans to bid on remaining $55 million auction bonds

Cold Spring Harbor Laboratory in New York intends to bid on the remaining maturities from its $55 million revenue bonds in the April 22 auction, according to a notice.

The series 2006 civic facility bonds priced through the Nassau County Industrial Development.

The laboratory intends to hold the $31.35 million of bonds it has already purchased in prior auctions and bid for the remainder of the bonds available in the auction.

Cold Spring said its interest rates have increased to as high as 9.55% for the bonds since February when the auction rate markets began to fail.

Clear Creek prices bonds

Elsewhere in Thursday's pricing news, the Clear Creek Independent School District in Galveston and Harris counties, Texas, priced $95.43 million unlimited tax school building and refunding bonds on Wednesday with a 4.699% true interest cost, according to pricing terms released to Prospect News.

The final par amount was lowered from an original sale estimate of $96.675 million.

The series 2008 bonds have serial maturities from 2010 through 2030 and 2033.

The bonds priced with 4% to 5% coupons to yield 2.37% to 4.67%.

Merrill Lynch & Co. is the senior manager of the negotiated sale. Co-managers are First Southwest Co., Coastal Securities, Morgan Stanley, UBS Investment Bank, Banc of America Securities LLC and JPMorgan.

Proceeds will be used to construct new schools, purchase building sites, upgrade technology and refund outstanding unlimited tax bonds.

In other pricing news, the Redevelopment Agency of Rialto of California confirmed it sold $52.285 million in tax allocation bonds (/A-/BBB+) on Thursday, but the offering terms were not immediately available.

The bonds were sold on a competitive basis.

The sale includes $30.005 million in series 2008B tax-allocation housing set-aside bonds and $22.28 million in series 2008C tax-allocation bonds.

Proceeds will be used to finance housing-related redevelopment and fund reserves for the bonds.

BJC Health will sell $369 million

Moving to upcoming bond sales, BJC Health System in Missouri plans to price $369 million series 2008 A-E variable rate demand bonds on April 21, a source said Thursday.

The bonds (Aa2/VMIG 1//) will price with an initial weekly rate through the Missouri Health and Educational Facilities Authority.

The bonds will price as $81.2 million series 2008A; $81.2 million series 2008B; $81.175 million series 2008C; $75 million series 2008D and $50 million series 2008E bonds.

JPMorgan and Morgan Stanley will manage the sale.

Proceeds of the Series 2008A, B and C bonds will be used to refund a bridge loan used to redeem series 2006A, B and C bonds. Proceeds from series 2008D and E bonds will be used to fund $124 million of new money projects in 2008 and 2009.

BJC entered into a swap agreement with the series 2006 bonds and receives a variable rate based on 68% of Libor.

BJC plans to maintain the swap, modify the fixed rate to 3.551% and apply it to the series 2008A, B, C bonds, according to the statement.

BJC also entered into two swap agreements with the series 2008D and the 2008E self-liquidity bonds. BJC receives a variable rate of 68% of LIBOR and pays a fixed rate of 3.4815% on both swaps.

California Water bonds pricing April 23

The California Department of Water Resources expects to price $633.155 million Central Valley Project water system revenue bonds on April 23, the issuer said Thursday.

The series AE bonds (Aa2/AAA/) will be sold first in a retail order period on April 22, said Perla Netto-Brown, chief of the department's division of fiscal services.

"We like to always do retail order periods first if we can to encourage retail buyers," she said.

The bonds have serial maturities from Dec. 1, 2008 through Dec. 1, 2029.

Goldman, Sachs & Co. is the senior manager of the negotiated sale.

Proceeds will be used to refund the department's series 1997S, series 1998U and series 2004AB outstanding revenue bonds, retire outstanding series 1 water revenue commercial paper notes and refund the series 2007A bond anticipation bonds.

Catholic Health to bring $250 million

Catholic Health Initiatives plans to price $250 million revenue bonds, according to a preliminary official statement.

The bonds that will price through the Colorado Health Facilities Authority include $40 million series 2008C2 bonds and $40 million series 2008C4 bonds due Oct. 1, 2041; and $60 million series 2008C5 and $60 million series 2008C8 bonds due Sept. 1, 2036.

The $50 million series 2008C bonds, due Oct. 1, 2041, will price through Montgomery County, Ohio.

JPMorgan and UBS Investment Bank are the remarketing agents.

The Colorado bonds will be used to refund Catholic Health's series 2006C2, C4, C6 and C8 bonds.

The Ohio bonds will be used to refund the series 2006C2 bonds.

Sutter Health to sell $329.15 million

Sutter Health in California intends to price $329.15 million revenue bonds, according to a preliminary official statement.

The series 2008A bonds (Aa3/AA-/) will price through the California Health Facilities Financing Authority.

Morgan Stanley is the senior manager of the negotiated sale.

Proceeds will be used to repay a line of credit.

Calls for additional information were not immediately returned.

The Massachusetts Bay Transportation Authority intends to price $53.385 million senior sales tax bonds on April 23, a source said Thursday.

A retail order period will be held April 22.

The series 2008B bonds (Aa2/AAA/) have serial maturities from 2011 through 2028 and a term bond due 2033.

Lehman Brothers will manage the negotiated sale.

Proceeds will be used to refund outstanding bonds, repay outstanding bond anticipation notes and fund a portion of the senior debt service reserve fund for the bonds.

New Jersey bonds to price

In other pricing news, the New Jersey Educational Facilities Authority plans to sell $291.075 million in series 2008D revenue refunding bonds (Aaa/AAA/).

The exact pricing date was not immediately available.

The bonds will be sold on a negotiated basis with Morgan Stanley as the lead manager. The bonds will be sold for the College of New Jersey.

The bonds are due in a serial structure from 2010 to 2019 with term bonds due 2023, 2029 and 2035.

Proceeds from the offering will be used to refund the authority's outstanding series 1999D and 2002D bonds.

The exact pricing date was not immediately available by press time Thursday.

Elsewhere in university bonds, the College of the Holy Cross in Massachusetts plans to price $116 million in series 2008 revenue refunding bonds on April 22 and May 8, the issuer confirmed Thursday.

The bonds (Aa3//) will be sold through the Massachusetts Health & Educational Facilities Authority on a negotiated basis.

Banc of America Securities is the senior manager for the sale.

The offering includes $45 million in series 2008A floating-rate revenue refunding bonds and $71 million in series 2008B revenue refunding bonds. The 2008B bonds will price April 22 and the 2008A bonds will price May 8.

Proceeds from the deal will be used to refund the college's series 2007A bonds and to construct a new science facility, complete the renovation of an existing science facility, renovate an existing theater, extend an existing campus road, acquire and install campus furnishings, build and renovate upgrades to buildings, systems and campus infrastructure.

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