Cape Fear Public Utility Authority sells $194.795 million revenue bonds; Tennessee prices G.O.s

By Cristal Cody and Sheri Kasprzak

New York, Aug. 20 - The week in municipals continued to pick up the pricing pace, with several offerings priced and several other upcoming sales announced.

"We had a break there for about a week or so where not much was getting done," a sellside source agreed when asked Wednesday about the recent lull in action. "Seems like things are picking up again."

The action was led by the Cape Fear Public Utility Authority in North Carolina, which priced $194.795 million water and sewer system revenue bonds with a 4.707667% true interest cost on Wednesday, chief financial officer Brent McAbee told Prospect News.

"The Treasury market gave up a little bit today and so did the munis, so we were able to actually reduce a few of the yields," he said. "We gained about two basis points from where our preliminary numbers indicated yesterday."

The series 2008 bonds (Aa3/AA/) priced with 3.5% to 5% coupons to yield 2.13% to 4.63% for the serial maturities from 2010 through 2028.

The terms due 2031 and 2035 priced with 5% coupons to yield 4.73% and 4.81%, respectively.

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

Proceeds will be used to pay acquisition and construction costs for improvements to the authority's water and sanitary sewer systems.

Tennessee prices G.O.s with 4.05%-5.28% TICs

Also on Wednesday, Tennessee priced $141.16 million general obligation bonds through competitive sales that attracted a lot of attention with nine bids.

"The deal was even close to making the market today, where the market prices off of your deal," said Mary-Margaret Collier, director of bond finance for the state. "We were very pleased with the rates, but a 4.05% on the tax-exempt one is fantastic."

The $125.8 million series 2008A bonds priced with a 4.050958% TIC from winning bidder Wachovia Securities, a market source also told Prospect News.

The bonds priced with 3% to 5% coupons to yield 1.69% to 4.61%.

The $15.36 million series 2008B taxable bonds were sold with a 5.28091% TIC from winning bidder Morgan Keegan & Co.

The bonds priced with 5% to 5.7% coupons to yield 3% to 5.7%.

The bonds (Aa1/AA+/AA+) have serial maturities from 2009 through 2028.

Proceeds will be used to refund $140 million of outstanding commercial paper and to acquire property for a state project.

Orange County school board COPs

In other pricing action on Wednesday, the School Board of Orange County in Florida sold $48.365 million certificates of participation as part of a larger sale, a source with the issuer told Prospect News.

The $48.365 million series 2008D COPs (A1/AA-/A+) priced with 3% to 5% coupons to yield 2.06% to 5.1%.

"They priced pretty aggressively, so we're comfortable with the rates," the source said.

The COPs have serial maturities from 2009 through 2027.

The TIC was not immediately available.

The board also plans to sell $51.02 million series 2008E variable-rate COPs in early September.

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

Proceeds will be used to refund the school board's series 2002B COPs.

Palm Beach sale confirmed

In other pricing news from this week, Palm Beach County in Florida priced $176.585 million in series 2008 public improvement revenue bonds on Tuesday, said an official statement released Wednesday.

The bonds (Aa1/AA+/AA+) were sold in a negotiated sale led by Merrill Lynch & Co.

The bonds are due 2009 to 2028 with term bonds due 2033 and 2038. The serials have coupons from 3.5% to 5% and yields from 3.46% to 4.73%. The 2033 bonds have a 5% coupon to yield 4.91%, and the 2038 bonds have a 5% coupon to yield 4.96%.

Proceeds will be used to acquire, renovate, construct and equip additional law enforcement facilities, to refinance debt and to make a deposit to a debt service reserve fund.

Oglethorpe Power to price bonds

The remainder of the week continues to be active with pricing action.

Burke County in Georgia plans to price $255.035 million pollution control revenue bonds for Oglethorpe Power on Thursday, a company source told Prospect News.

The sale includes $50 million series 2008A, $50 million series 2008B, $50 million series 2008C, $50 million series 2008D and $55.035 million series 2008E bonds.

The bonds (//A) will be sold in a negotiated sale led by senior manager JPMorgan.

Proceeds will be used to repay outstanding commercial paper.

The Florida Board of Education also intends to price $200 million lottery revenue bonds on Thursday, according to a sale notice.

The series 2008B bonds (A2/AAA/A) have serial maturities from 2009 through 2028, with options for term bonds beginning in 2019.

Florida sells bonds competitively with an 18-hour notice.

Proceeds will be used to fund the costs of constructing, acquiring or renovating educational facilities in various school districts.

Tarrant County, Texas, sale ahead

Coming up, Tarrant County in Texas plans to price its previously announced $112 million limited tax bonds the week of Aug. 25, according to a sale calendar.

The series 2008 bonds have serial maturities from 2009 through 2028.

JPMorgan is the senior manager of the negotiated sale.

Proceeds will be used to purchase, construct, renovate and maintain streets, roads, highways and bridges; to construct jail facilities and county and state court buildings and to expand the county's medical examiner facilities and crime lab.

Also ahead, Ross County, Ohio, plans to price $138.35 million revenue refunding bonds for the Adena Health System, according to a preliminary official statement released Wednesday.

The series 2008 bonds (/A/) have serial maturities from 2009 through 2018 and terms due 2028 and 2038.

Cain Brothers will manage the negotiated sale.

Proceeds will be used to fund a termination payment for qualified hedges and to refund the series 2001 refunding and improvement bonds and series 2006 revenue refunding and improvement bonds.

Olin College of Engineering revenue bonds

Further out, the Franklin W. Olin College of Engineering intends to price $93.8 million revenue bonds on Sept. 3, a source with the issuer said Wednesday.

"We hope we can make that schedule. We're still waiting for the ratings agencies to finish, which we expect to happen in the next day or two," the source said.

The $10 million series 2008C1, $41.9 million series 2008C2 and $41.9 million series 2008C3 bonds will price through the Massachusetts Development Finance Agency.

The bonds (A1) will be sold in a negotiated sale managed by Lehman Brothers.

Proceeds will be used to refund the series A1 and A2 auction-rate securities.

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