Illinois Finance Authority may price $1.33 billion; Kentucky State Property brings $398.51 million

By Cristal Cody and Sheri Kasprzak

New York, Oct. 8 - Wednesday provided some light pricing action, even as some issuers postponed sales. Meanwhile, more than a billion in bonds may be coming out of the Illinois Finance Authority.

The Kentucky State Property and Buildings Commission led pricing activity with a $398.505 million sale of revenue bonds with a 5.49% true interest cost, a source said Wednesday.

The sale included $375 million series 90, $18.5 million series 91 and $5.005 million taxable series 92 bonds.

Morgan Stanley was the senior manager of the negotiated sale. No additional pricing terms were immediately available.

Also on Wednesday, Hennepin County in Minnesota priced $15 million in capital notes with a 3.72% TIC and postponed the competitive sale of the remaining $82.445 million in bonds and certificates, a market source told Prospect News.

The county held off on pricing the $63.51 million series 2008D general obligation bonds with serial maturities from 2009 through 2028 and $18.935 million series 2008F lease revenue refunding certificates of participation with serial maturities from 2009 through 2015.

The delay was chosen to avoid overwhelming the market, which has shifted to more retail investors as the primary buyers, the source said.

"The primary market appears to be moving again, but that being said, there's a lot of larger transactions that are still sitting on the sidelines," the source said.

"There are questions of institutional appetite. In the current market, all of the market information tells us the primary buyers are retail purchasers."

The $15 million series 2008E G.O. capital notes (Aaa/AAA/AAA) priced with 3.25% to 4.5% coupons from 2009 through 2017. The yields are not reoffered.

Piper Jaffray Cos. was the winning bidder out of five bids in the competitive sale.

Proceeds will be used for library improvements, various capital improvements, costs of capital equipment, to defease obligations under the lease and purchase option agreement between Center Hospital and the county and to redeem the series 1998 lease revenue refunding COPs' serial maturities from 2009 through 2015, which are callable on Nov. 15, and the series 1998B general obligation bonds' serial maturities from 2009 through 2019, which are callable on Dec. 1.

Broward school bonds delayed

Even though some pricing action was taking place, other issuers were less confident about market conditions.

The School District of Broward County in Florida shelved its $125 million sale of series 2008 tax anticipation notes, district spokesman Keith Bromery said Wednesday.

The notes had been slated to price Wednesday on a competitive basis, but the recent deterioration of the credit markets gave the district pause about the sale, said Bromery.

"Because of credit market conditions, we've decided we don't need the money," said Bromery.

No new pricing date has been set, but Bromery said as soon as market conditions improve, the district will attempt to sell the notes again.

Public Financial Management and Fidelity Financial Services are the financial advisers for the deal.

The notes are due Sept. 30, 2009.

Proceeds will be used for capital expenses incurred before taxes are received.

Illinois Finance may sell $1.33 billion

Moving back to the possible sale from Illinois Finance Authority, the authority is expected to hold a public hearing at its Springfield office Friday for comment about the sale of up to $1.329 billion bonds, according to a notice released Wednesday.

The authority is considering selling bonds for several projects, including $450 million for the Carle Foundation, $375 million for Rush University Medical Center Obligated Group, $275 million for Silver Cross Hospital and Medical Center and $150 million for the Art Institute of Chicago.

California DOT to price $94.14 million GABs

On Thursday, the California Department of Transportation intends to price its previously announced $94.135 million federal highway grant anticipation bonds, according to a sale calendar.

The series 2008A bonds (Aa3/AA-/AA-) have serial maturities from 2009 through 2020.

The bonds also were offered through retail orders on Wednesday.

JPMorgan is the senior manager of the negotiated sale.

Proceeds will be used to finance two California highway rehabilitation projects in the cities of Auburn and Truckee.

CoxHealth to price $105 million

In other upcoming deals, the Health and Educational Facilities Authority of the State of Missouri plans to price $105 million variable-rate revenue bonds for CoxHealth on Tuesday, a source told Prospect News.

The $70 million series 2008B bonds will price initially with a commercial paper interest rate.

The $35 million series 2008C bonds will price initially with a weekly interest rate.

The bonds (Aaa//AA+) are due in 2043.

Merrill Lynch & Co. is the senior manager of the negotiated sale.

Proceeds will be used to pay or reimburse a portion of project costs for new facilities, including an emergency room, trauma center facility and an ambulatory surgery center.

Ohio infrastructure bonds ahead

Also coming up, Ohio expects to price $385 million infrastructure project revenue bonds in the upcoming week, a source said Wednesday.

The series 2008-1 bonds (Aa2/AA/AA-) have serial maturities from 2009 through 2020.

Morgan Stanley is the senior manager of the negotiated sale.

Proceeds will be used to finance highway and bridge projects in the state.

Ohio State University also plans to price $230.065 million in general receipts bonds, according to a preliminary official statement.

The series 2008A bonds (Aa2/AA/AA) have serial maturities from 2009 through 2018 and terms due 2023 and 2028.

Morgan Stanley is the senior manager of the negotiated sale.

Proceeds will be used to pay for projects that include upgrades and renovations to utilities, roads and facilities, including the Ross Heart Hospital, and for the acquisition of an airport hangar.

Coming up, the Industrial Development Authority of the County of Mohave in Arizona intends to price $206.005 million correctional facilities contract revenue bonds for Mohave Prison, according to a preliminary official statement.

The series 2008 bonds (/BBB+/) have serial maturities from 2011 through 2025.

Morgan Keegan & Co. will manage the negotiated sale.

Proceeds will be used to refund the series 2004A and 2004C bonds and to finance the acquisition, construction, equipment and operational costs for a 2,000-bed private prison for male inmates.

© 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.