California prices upsized $5 billion RANs with 4.48% TIC; Oklahoma Power delays revenue bond sale

By Sheri Kasprzak

New York, Oct. 16 - The number of deals tapered tapered off Thursday - but compensating was the fact that the day's action was led by a massive sale from the State of California. The state priced $5 billion in revenue anticipation notes - upsized from its planned $4 billion sale.

After increasing the size, the state was able to satisfy investor demand and the notes priced with a 4.48% true interest cost, said Tom Dresslar, spokesman for the state treasurer's office.

The state sold $3.92 billion of the series 2008-09A notes (/SP-1/F1) through retail orders on Tuesday and Wednesday and then upped the size from $4 billion to $4.5 billion and then again to $5 billion on Thursday.

The notes priced with 5.5% coupons to yield 3.75% May 20, 2009 and 4.25% June 22, 2009.

Banc of America Securities and Goldman, Sachs & Co. were the senior managers of the negotiated sale.

The proceeds will be used for the state's cash flow management needs.

Meanwhile, new offerings are still coming down the pipeline and at least one market source says he feels munis will continue to improve and offerings will continue to flow.

"For a few weeks there, issuers were pulling back, but I think things are more stable now and we are seeing more and more issues on the table and I think that's going to continue," he said.

"There's certainly an appetite for them. Yields are really awesome right now, even on short-term bonds. We're seeing 4% on some 10-year bonds."

Oklahoma power sale delayed

Meanwhile, at least one other issuer decided to opt out of Thursday's market.

The Oklahoma Municipal Power Authority postponed a negotiated sale on Thursday of $105.765 million in revenue bonds because of soaring interest rates, a source told Prospect News.

The series 2008A bonds (A2/A/) have terms due 2029 and 2039.

"The market is too haywire right now. Rates are too high and there is not sufficient investor demand now," the source said.

"We're waiting until things calm down."

JPMorgan is the senior manager of the negotiated sale.

The proceeds will be used to finance a portion of construction and acquisition costs for an ownership interest in two electric generating plants and to fund other capital projects and interest on the bonds during the construction period.

Philly school district sale ahead

Meanwhile, in upcoming sales, the School District of Philadelphia is scheduled to price $397.1 million in series 2008 general obligation and general obligation refunding bonds on Oct. 28, a sell-side source told Prospect News Thursday.

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

The sale includes $284.4 million in series 2008E general obligation bonds and $112.7 million in series 2008F general obligation refunding bonds.

Proceeds will be used for various capital projects and for prepaying an outstanding loan made to the district by the Dauphin County General Authority.

North Texas Tollway to price $350 million

In other upcoming sales, the North Texas Tollway Authority plans to price $350 million in revenue refunding bonds, according to a preliminary official statement released Thursday.

The sale includes series 2008K first tier current interest bonds and series 2008L first tier put bonds.

Citigroup Global Markets is the senior manager of the negotiated sale.

The proceeds will be used to refund the series 2007 bond anticipation notes and a portion of outstanding commercial paper notes and fund the development and construction of highway projects.

Coming up next week, the Beaufort County School District in South Carolina intends to price $62.155 million in general obligation bond anticipation notes through a competitive sale on Oct. 23, according to a preliminary official statement released Thursday.

The series 2008C notes are due Nov. 6, 2009.

Ross, Sinclaire & Associates is the district's financial advisor.

The proceeds will be used to fund various school projects.

Glendale bonds to fund MLB field

Also coming up, the City of Glendale in Arizona is expected to price $199.75 million in series 2008 third-lien excise tax revenue bonds, said a preliminary official statement. The bonds will be sold for the Third Loop 101 Public Facilities Corp.

The bonds (A2/AA/) will be sold on a negotiated basis with Wachovia as the senior manager. The co-managers are JPMorgan, Merrill Lynch and Siebert Brandford Shank & Co.

The sale includes $134.72 million in series 2008A bonds, $49.485 million in series 2008B and $15.995 million in series 2008C bonds.

The 2008A bonds are due from 2017 to 2038 and the 2008B bonds are also due from 2017 to 2038. The 2008C bonds are due from 2014 to 2017.

Proceeds will be used to reimburse the city for the construction of a Major League Baseball spring-training facility.

Miami-Dade school sale

Elsewhere, the School District of Miami-Dade County in Florida plans to price $100 million in series 2008 tax anticipation notes, said a preliminary official statement released Thursday.

The notes will be sold on a competitive basis, though no pricing date has been set at this time. De Lara Associates and Public Resources Advisory Group are the financial advisers for the sale.

The notes are due April 15, 2009.

Proceeds will be used for operating expenses of the district until taxes can be collected.

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