Auction-rate conversions tinge day filled with new pricing activity; Jacksonville Port to convert

By Cristal Cody and Sheri Kasprzak

New York, Feb. 28 - Auction-rate bonds were yet again at the forefront of municipals news Thursday with even more issuers choosing to convert their auction-rate securities into fixed-rate bonds.

Even though some issuers were announcing their plans for conversion, a few issuers are counting on the problems being confined to the auction sector and going for variable-rate bonds.

Reno, Nev. plans to bring $146.71 million in senior lien sales tax revenue refunding bonds on March 4 and those bonds will be variable rate and reset at the daily rate.

"Letters of credit really aren't where the problem is," said one source connected to the deal, who did not want to be identified.

"We're pretty confident that it will go well. Offerings like ours are doing pretty well right now, so we're not worried."

The series 2008A bonds (Aaa/VMIG1) are being sold for the ReTRAC-Reno Transportation Rail Access Corridor.

Goldman, Sachs & Co. is the lead manager for the negotiated offering.

Jacksonville Port Authority to convert

Among the issuers choosing to convert their auction-rate securities is Jacksonville Port Authority out of Florida.

The authority said Thursday it will convert its series 2006 revenue refunding bonds (Aaa/AAA) on March 5.

The conversion will impact the authority's long-term interest period on the interest period ending November 2009.

If Morgan Stanley, the remarketing agent, can't remarket the bonds and the authority does not purchase them, the bondholders must hold their bonds until the bonds are remarketed - at a 12% interest rate, an official statement said Thursday.

Ohio Public Facilities prices G.O.s

Moving to Thursday's pricing activity, the Ohio Public Facilities Commission priced $137.965 million in general obligation refunding bonds (Aa1/AA+/AA+).

The bonds include series 2008A higher-education bonds due 2010 to 2014, series 2008A common school bonds due from 2010 to 2016 and series 2008A infrastructure improvement bonds due 2010 to 2012. The exact pricing terms were not available by press time Thursday.

Proceeds will be used to refund bonds used for capital improvements to higher education, common schools and suburban facilities.

UBS Investment Bank was the lead manager for the negotiated sale.

Elsewhere, the Redevelopment Agency of the City of Rialto in California priced $100.11 million in tax allocation bonds (A-/BBB+), confirmed a source at the issuer. The bonds were still being priced late Thursday afternoon.

The bonds were sold on a competitive basis and have a serial structure from 2008 to 2037.

The deal includes $46.75 million in series 2008A tax-exempt bonds, $30.795 million in series 2008B taxable bonds and $22.565 million in series 2008C taxable bonds.

Proceeds will be used for housing and non-housing redevelopment activities and fund reserve accounts.

Thursday sales

Other sales were expected Thursday, including an offering from the Children's Healthcare of Atlanta. The health care organization planned to price $193 million certificates of participation (Aa2/VMIG1). It also planned to price $72.965 million series 208A variable-rate demand bonds through the Development Authority of Fulton County; and $120 million 2008B variable-rate demand certificates through DeKalb Private Hospital Authority.

The terms were not immediately available.

The city of Austin was expected to price $50 million series 2008 taxable series electric utility revenue refunding bonds (A1) on Thursday. The bonds were planned for a negotiated sale managed by Banc of America Securities. The sale could not be confirmed by press time.

North Texas Tollway brings billions

Municipal bond sales are expected to be in the billions of dollars next week.

The North Texas Tollway Authority plans to price $2.315 billion revenue refunding bonds (A2/A-) on March 6.

The offering includes $1.413 billion in series 2008A first-tier current interest bonds, $233.2 million in series 2008B first-tier current interest bonds, $19.115 million in series 2008C first-tier taxable current interest bonds, $150 million in series 2008D first-tier insured capital appreciation bonds and $500 million in series 2008E first-tier put bonds.

The bonds have an A2/A- rating, except series 2008D, which is expected to be rated Aaa/AAA. Series 2008D bonds are insured by Assured Guaranty.

Bear, Stearns & Co. is the lead underwriter for the negotiated sale.

Ohio HFA to bring $187.575 million

In another upcoming deal, the Ohio Housing Finance Agency plans to price $187.575 million in residential mortgage revenue bonds sometime in March, a preliminary official statement said. The exact pricing date could not be confirmed Thursday.

The bonds will sell on a negotiated basis through lead manager George K. Baum & Co.

The 2008A bonds are due as serials from 2009 to 2018 with term bonds due 2013 and 2018 and the 2008B bonds are due 2039 and reset at the weekly rate. The 2008C bonds are due 2040 and also reset at the weekly rate. The 2008D bonds have term maturities in 2018 and 2029.

Proceeds will be used to finance mortgage loans in Ohio, to refund the authority's 1998A-1 residential mortgage revenue bonds and refund the authority's outstanding general obligation bonds.

Also coming up are $162.715 million in general obligation bonds from the City of Boston on March 6.

The bonds include $126.185 million in series 2008A bonds and $36.53 million in series 2008B bonds. The 2008A bonds have a serial structure from 2009 to 2028 and the series 2008B bonds are due from 2009 to 2019.

The bonds are being sold competitively.

Proceeds will be used to refund the city's outstanding series 1998B and 1998C bonds.

Florida bond sales

Florida is in the market with several future sales and a $155 million bond issue that priced Thursday.

The state priced $155 million right-of-way acquisition and bridge construction bonds with a 5.2% true interest cost in a competitive sale on Thursday, the issuer told Prospect News.

Lehman Brothers won the bidding with 3% to 5.125% coupons and 2.35% to 5.24% yields for the serial maturities 2008 through 2028, said Carol Bagley of the state's division of bond finance.

The bonds (Aa1/AAA/AA+) include a term due 2037 that priced with a 5.25% coupon and 5.35% yield.

The state plans to price $586.6 million full faith and credit State Board of Education public education capital outlay bonds. The sale may happen no earlier than March 6, the state said in a notice.

The bond division reported the state also will redeem $147.13 million Department of Transportation turnpike revenue refunding series 1997A bonds on March 14.

The redemption is only for maturities July 1, 2008, through July 1, 2021.

The state also expects to price $278 million series 2008A Florida forever revenue bonds from the state Department of Environmental Protection; and $315.4 million series 2008A State Board of Education lottery revenue bonds structured July 1, 2008, to July 1, 2027.

Florida sells bonds competitively on 18 hours notice.

Michigan, Friendswood price

Michigan Strategic Fund priced $77.37 million insured state House of Representatives limited obligation revenue and revenue refunding bonds, a source told Prospect News on Thursday.

The $75.29 million series 2008A bonds mature 2011 to 2023, and $1.13 million series 2008B taxable bonds are due 2011.

The bonds (Aaa/AAA) are insured by Assured Guaranty.

The final pricing terms were not available before press time.

Citi and Oppenheimer are the underwriters of the negotiated sales.

Proceeds will be used for debt issued in 1998 to finance construction of an office building for the House of Representatives, pay off an elevator loan and for capital improvements.

Friendswood Independent School District priced its $99.465 million bond sale on Thursday after a one-day delay, the issuer confirmed.

The Galveston County, Texas, school district priced series 2008 unlimited tax schoolhouse bonds (A1/A+/-) with serial maturities from 2013 through 2037.

UBS Investment Bank is the lead manager of the negotiated sale.

Proceeds will be used for school equipment, property acquisition and construction projects.

The final pricing terms were not available by press time.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.