Variable-rate bonds see improved market, source says; Trinity Health of Michigan brings $492 million

By Cristal Cody and Sheri Kasprzak

New York, Oct. 29 - Variable-rate bonds are finding a better market these days, a sellside source said Wednesday.

"The variable-rate market is starting to come back," the source told Prospect News.

"It's not completely stabilized yet, but we've seen a couple of deals come through in the last two weeks that have been well received."

The fixed-rate market still has some volatility, the sellsider said.

"There were a couple of deals that priced yesterday in the health-care world. They didn't get all their orders filled, but they came to the market," the source said. "It kind of signaled the first fixed-rate health-care deals since the turmoil began. In the next couple of weeks, a good number of deals in the pipeline are coming through, both variable rate and fixed rate."

In other news Wednesday, a healthy crop of pricings took place, indicating that some issuers might be having an improved time selling their bonds.

Trinity Health prices $492 million bonds

Michigan-based Trinity Health Credit Group sold $492 million in fixed-rate revenue and refunding bonds in Idaho and Michigan with a combined 6.37% true interest cost, the issuer said Wednesday.

Trinity also plans to complete the second portion of its financing plan through the Nov. 12 sale of $820 million variable-rate bonds.

"We're very pleased the window opened up," said Jim Bosscher, vice president of treasury.

"The markets had been in a state of gridlock for several weeks."

Trinity Health sold $314 million in series 2008A-1 and 2008A-2 revenue and refunding bonds (Aa2//AA) through the Michigan State Hospital Finance Authority on Tuesday, he said.

The bonds priced with 5% to 6.5% coupons to yield 5.25% to 6.65%.

Trinity also sold $178 million in series 2008B revenue and refunding bonds (Aa2/AA/AA) through the Idaho Health Facilities Authority

The bonds priced with 4.75% to 6.25% coupons to yield 4.95% to 6.5%.

The bonds were sold through negotiated sales led by managers Merrill Lynch and Goldman, Sachs & Co.

The proceeds will be used to finance or refinance the costs to acquire, construct and equip health-care facilities in Idaho and Michigan and to refund outstanding debt.

Fairview Health prices $222.5 million

Fairview Health Services priced $222.5 million in variable-rate revenue bonds through the City of Minneapolis with a 1.55% initial weekly interest rate, a sellside source said Wednesday.

The $84.375 million series 2008C, $28.125 million series 2008D and $110 million series 2008E bonds were oversubscribed on the orders placed Tuesday, the source said.

"We had 12 to 13 full orders, so we had no problem selling the bonds," the sellsider said.

The bonds (Aaa/AAA/) are due in 2047.

Citigroup Global Markets managed the negotiated sale of the series 2008C bonds. RBC Capital Markets managed the sale of the series 2008D bonds, and Wells Fargo Brokerage Services LLC managed the series 2008E bonds.

The proceeds will be used to finance the costs to construct and equip health-care facilities, including a replacement children's hospital at the University of Minnesota Medical Center.

Princeton University sells $208.81 million

Also on Wednesday, the New Jersey Educational Facilities Authority sold $208.805 million in revenue refunding bonds for Princeton University with a 4.36% TIC, the issuer said Wednesday.

The series 2008K bonds (Aaa/AAA/) priced with 3.5% to 5.25% coupons to yield 1.5% to 4.84%, said Roger Anderson, executive director of the authority.

"The market has been all over the place the last month or so, and these are very good compared to what we were looking at a couple of weeks ago," he said.

More than 90% of the bonds were sold through retail orders on Tuesday, and the authority priced the rest to institutional investors in the last hour of business, he said.

The bonds have serial maturities from 2009 through 2023.

JPMorgan was the senior manager of the negotiated sale.

The proceeds will be used to refund and defease the series 2001B, 2002B and 2003F revenue bonds.

Bergen County prices G.O.s

In other pricing news Wednesday, Bergen County, N.J., priced $79.821 million in series 2008A general obligation bonds and 2008B hospital bonds, said a term sheet released by a sellside source.

The sale included $68.095 million in series 2008A G.O. bonds and $11.726 million in series 2008B taxable hospital bonds.

The bonds (Aaa) were sold on a competitive basis.

UBS Financial Services won the G.O. bid, and BMO Capital Markets won the hospital bond sale.

The series 2008A bonds priced with a 4.444434% net interest cost. The bonds are due from 2009 to 2023 with coupons from 4% to 4.75%, all priced at par.

The 2008B bonds have a 6.205810% net interest cost. The bonds are due 2009 to 2023 with coupons from 5.75% to 6.75%, also priced at par.

Proceeds from the sale will be used for construction or renovation on capital projects throughout the county.

Ohio Housing Finance sells revenue bonds

The Ohio Housing Finance Agency priced $72 million in residential mortgage fixed-rate revenue bonds at par with 3.5% to 6.3% coupons on Wednesday, the issuer told Prospect News.

"We are very pleased being able to issue housing bonds in this volatile financial market," said Bob Connell, director of debt management.

The agency had planned to sell $50 million in revenue bonds and the remainder in variable-rate debt but decided to size the entire sale in fixed-rate bonds, he said.

The series 2008J bonds (Aaa) have serial maturities from 2010 through 2018 and terms due 2023, 2028, 2033 and 2039.

George K. Baum & Co. was the senior manager of the negotiated sale.

The proceeds will be used to finance the purchase of owner-occupied residences by qualified low- and moderate-income residents and to refund outstanding obligations.

New Hampshire to price $150 million G.O. bonds

Coming up, the State of New Hampshire expects to price $150 million in G.O. capital improvement bonds on Wednesday, state treasurer Catherine Provencher told Prospect News.

The series 2008C bonds also will be offered through retail orders on Monday and Tuesday, she said.

The bonds have serial maturities from 2010 through 2028.

Merrill Lynch is the senior manager of the negotiated sale.

The proceeds will be used to fund various capital improvement projects.

Catholic Health Initiatives also intends to price $172.485 million in revenue bonds through the Washington Health Care Facilities Authority on Nov. 5, a source told Prospect News.

The series 2008D bonds (Aa2/AA/AA) have serial maturities from 2016 through 2018 and terms due in 2022, 2028 and 2036.

JPMorgan is the senior manager of the negotiated sale.

The proceeds will be used to refund and retire the series 2007A1, 2007A2 and 2007A3 revenue bonds.

Also ahead next week, Palm Beach County in Florida expects to price $97.125 million in public improvement revenue bonds on Nov. 6, a source said Wednesday.

The series 2008-2 bonds (Aa1/AA+/AA+) will be offered through retail orders on Nov. 5.

The bonds have serial maturities from 2009 through 2025 and terms due in 2028.

Loop Capital Markets LLC is the senior manager of the negotiated sale.

The proceeds will be used to fund a portion of the county's obligation to the Max Planck Florida Corp. to establish a biomedical research facility and to refinance obligations to the Sunshine State Governmental Financing Commission from the $48.872 million outstanding in series J commercial paper revenue notes.

Nebraska energy agency to sell bonds

Looking to pricing action in the distant future, the Municipal Energy Agency of Nebraska said Wednesday it hopes to price $75.91 million in series 2008A subordinate power supply system revenue bonds during the first week of December.

The bonds (//A) will be sold on a competitive basis.

"It is a long way off yet, but so far, we're aiming for the first week of December," said an issuer source reached Wednesday morning.

"We don't have a lot of details on it right now, but our hope is to price in December."

Proceeds from the sale will be used to acquire a coal-fired plant and make capital improvements to it, to redeem the agency's outstanding series 2003B auction-rate bonds and to make a deposit to a debt service reserve fund.

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