Minnesota's Metropolitan Council prices $129.15 million bonds; Union County, N.J., brings $105 million

By Cristal Cody and Sheri Kasprzak

New York, Feb. 20 - Municipal bond pricing action took off on Wednesday, with at least nine major offerings priced. Even so, the tone of the market wasn't necessarily in the bonds that priced - but in the ones that didn't.

The current auction-rate crisis has led some issuers to back out of their planned variable-rate offerings.

The Orange County School Board in Florida has indefinitely postponed the sale of $86.58 million of variable-rate refunding certificates of participation, the issuer said Wednesday in an interview with Prospect News.

The district had planned to price the series 2008A certificates (A1) in a negotiated sale by Citigroup Global Markets on Wednesday.

The district already has variable rate issues outstanding and decided to wait until the market stabilizes, said Steve Compton, senior administrator of the district's treasury services.

Proceeds would have been used to refund $80.4 million in 2002A certificates.

"It's because of the variable-rate market," he said.

"Plus, we already have variable-rate issues out there. We're going to take care of the variable rate we have right now with the insurers. I couldn't even guess as to when we could start this back up the way the markets are the way they are. Doesn't appear that's it's going to be settling down soon."

YMCA of Greater Houston hasn't priced

Elsewhere, the Harris County Cultural Education Facilities Finance Corp. had been scheduled to price $158.5 million in 2008A revenue bonds on behalf of the YMCA of Greater Houston, but the bonds may not have priced yet. Those bonds are apparently not variable rate.

"So far, no bond dollars have been received," said Alexa Valencia, a spokeswoman for the YMCA, in an interview Wednesday afternoon.

"We're not presently releasing any detailed information on any bond offering."

Calls to the cultural education facilities financing corporation were not immediately returned.

The corporation had been slated to price the bonds on a negotiated basis through lead manager Goldman, Sachs & Co. to pay for the construction, acquisition, equipment and renovation of capital projects and for a debt service fund.

Minnesota council sells $129.15 million

Heading up pricing activity was a $129.15 million offering of bonds from the Metropolitan Council of Minnesota.

The council priced 2008B general obligation transit bonds (Aa1/AA/AA+) with maturities from 2009 to 2028 and coupons ranging from 3% to 4.625% and yields from 2.1% to 4.08%. The offering included term bonds due from 2021 to 2028 with yields from 4.28% to 4.7%, according to Alan Hoppy with the council's treasury department.

The council also priced 2008C general obligation wastewater revenue bonds due from 2009 to 2028 with coupons from 3% to 5% and yields from 2% to 4.51%.

Also priced were 2008D general obligation wastewater revenue refunding bonds with a serial structure from 2009 to 2014 and coupons from 3% to 3.25%. The yields came at between 2% and 3%.

The council plans to use the proceeds from the B bonds for capital expenses outlined it its transit master plan and transit capital improvement plan. The C bonds will be used to buy and improve equipment in the district's wastewater improvement plan and the D bonds will be used to refund the council's outstanding general obligation promissory note issued in 1993.

Union County brings $105 million

In other pricing news Wednesday, Union County in New Jersey priced $105 million in general improvement bonds, the issuer said.

The bonds priced at par with coupons from 3.25% to 4.5%, in a serial structure from 2009 to 2028, said Larry Caroselli, the county's director of finance, in an interview.

The bonds were sold on a competitive basis with Bank of America winning the bid with a 4.28% true interest cost.

The offering was conducted as a single sale, Caroselli said, but the proceeds will be used for county projects, improvements at the county's vocational-technical schools and improvements to equipment and machinery at the county's colleges.

Also slated to price Wednesday was a $385.05 million offering of series 2008A refunding bond from the New York Local Government Assistance Corp.

The full terms of those bonds were not available by press time Wednesday.

The bonds were expected to price in a serial structure from 2009 to 2021, on a competitive basis.

The proceeds will be used to refund the outstanding 1996A, 1997A and 1997B bonds.

Rochester prices

Also priced Wednesday was $58.225 million in general obligation bonds (A2) and $87.12 million in bond anticipation notes from Rochester in New York.

The city sold the bonds and notes in competitive sales, pricing $19.005 million in series 2008A bonds with coupons from 3% in 2009 to 4% in 2022.

Depfa First Albany Securities LLC submitted the winning bid, according to a pricing sheet released to Prospect News.

UBS Securities won the bidding on the $39.22 million series 2008B bonds with coupons from 3% in 2008 to 4.25% in 2026.

Roosevelt & Cross won the bidding on the BANs (MIG 1). The notes have a 2.5% rate, according to the pricing sheet. The bonds mature Feb. 27, 2009.

Kent sells deal

Kent, Wash., also priced $63.28 million bonds in two series Wednesday with true interest costs up to 5.203%.

"We're pleased with the results. The sale went very well in a non-stable market," said Bob Nachlinger, city finance director.

The city sold $53.15 million series 2008 special events center sales tax bonds and $10.13 million series 2008 taxable special events center revenue bonds.

The sales tax bonds have serial maturities from 2020 to 2028 with term bonds in 2028, 2032 and 2036.

The sales tax bonds priced with a 4.909% true interest cost, and 4% to 5.25% premium and discount coupons with yields from 4.19% to 4.97%, he said.

The 2028 term bond priced with a 4.75% coupon to yield 4.8%; the 2032 term bond priced with a 5.25% coupon to yield 4.79%; and the 2036 term bond priced with a 5.25% coupon to yield 4.83%.

The revenue bonds priced at par with coupons from 3.159% in 2009 to 5.754% in 2020, Nachlinger said. The bonds priced with a true interest cost of 5.203%. The revenue bonds have serial maturities from 2009 through 2020.

The bonds (AA-) are insured by FSA.

PiperJaffray is the lead underwriter, with co-managers Lehman Brothers and Wachovia Bank, National Association.

King County scheduled

The Public Hospital District 1 in King County, Wash., also was expected to price $115 million limited tax and general obligation bonds on Wednesday

The series 2008 bonds (Aaa/AAA/AAA) will be sold as fixed-rate bonds with 30-year maturities, said Jeannine Grinnell, vice president of finance and treasurer for Public Hospital District 1, also known as Valley Medical Center.

Morgan Stanley is the underwriter of the negotiated pricing.

Additional information was not available before press time.

Texas Public Finance bonds priced

Earlier this month, the Texas Public Finance Authority priced $224.51 million in general obligation refunding bonds, the issuer confirmed to Prospect News Wednesday.

The bonds priced Feb. 15, according to a source at the issuer.

The bonds (Aa1/AA/AA+) priced in a serial structure from 2009 to 2012 with a term bond due 2015. The coupons came at 5% for all maturities with yields ranging from 2.23% to 3.02%.

UBS Securities LLC was the lead agent for the negotiated sale.

The authority will use the proceeds to refund a portion of its outstanding 1997 general obligation refunding bonds. Those bonds have coupons from 4.8% to 5.25%, priced at par in a serial structure from 2009 to 2012, also with a term bond due 2015.

Nebraska Authority reveals terms

Nebraska Investment Finance Authority revealed the details Wednesday of the $50 million fixed-rate and floating-rate bonds it priced at par with coupons from 2.5% to 5.5%.

The authority, on Feb. 14, sold $25 million in series 2008A fixed-rate single-family housing revenue bonds with coupons from 2.5% in 2009 to 4.45% in 2018, according to the final pricing wire. The 2028 term bond priced with a 5.375% coupon, and the 2039 term bond priced with a 5.5% coupon.

The initial rate has not been set on the $25 million variable rate bonds, said Steve Clements, chief operating officer for the finance authority. The authority is not exposed to variable rate risks with the sale, Clements said.

"The authority enters into a series of interest rate swaps that create a synthetic fixed rate to us, so we are paying a net fixed rate, even though the bond holder itself is paid a variable rate," he said. "The swap counterparty pays us the variable rate, which is based on a variable rate index similar to our bond rates."

Lehman Brothers handled the negotiated sale.

North Texas Tollway Authority to price deal

Moving to upcoming offerings, the North Texas Tollway Authority plans to hit the market with the sale of $2.315 billion revenue refunding bonds, according to a preliminary official statement.

The bonds will price as:

• Series 2008A bonds of $1.413 billion first-tier current interest bonds

• Series 2008B $233.2 million first tier current interest bonds

• Series 2008C $19.115 million first tier taxable current interest bonds

• Series 2008D $150 million first tier insured capital appreciation bonds

• Series 2008E $500 million first tier put bonds

All of the bonds carry an A2/A- rating, except series 2008D, which is expected to be rated Aaa/AAA, according to the statement. Series 2008D bonds are insured by Assured Guaranty.

Lead underwriters are Bear, Stearns & Co., Citi and Lehman Brothers.

Additional information was not available.

Light trading remains off a touch

Looking to the secondary market, a trader told Prospect News that economic data had some munis off just a touch.

"I haven't seen a lot trading today; it's still pretty quiet," said the New York-based trader early Wednesday afternoon.

"We had some data out today, so that seems to be causing a bit of weakness. It's nothing particularly disturbing. As I said, I've only seen a few things trading today."

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