Market conditions keep issuers on edge, insider says; Oregon plans large block of bond offerings

By Cristal Cody and Sheri Kasprzak

New York, May 16 - As issuers prepare for the coming week, one sellside source said some may be feeling out the waters of the market to see if they will proceed with their bond sale.

"Things have been shaky here and there, so some issuers may be hesitant going out," he said.

"I think issuers this week are going to take a wait-and-see approach to the market. We may see some put their deals off until later, but it's really too early to tell."

One issuer that is coming out in force is the state of Oregon. The state has a number of offerings coming up this week, said Larry Groth, the assistant director for the state's debt division.

Oregon set to price

Among the offerings coming from Oregon during the week of May 19 is a $60.155 million sale of state lottery revenue bonds from the Oregon Department of Administrative Services.

The $46.12 million tax-exempt series 2008A and taxable $14.035 million series 2008B bonds probably will sell first in a retail order period and price on Wednesday or Thursday, Groth said.

"One of the things in negotiated sales is it gives us the flexibility on getting the bid in depending on what's going on in the market," he said. "We could throw in some refunding opportunities in there. When we get to market, we'll see how the rates are."

The series 2008A bonds have serial maturities from 2014 through 2028. The series 2008B bonds have maturities from 2009 through 2014.

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

Proceeds will be used to make grants for and pay a portion of the costs of projects including the creation of housing for the homeless through construction and acquisition of 150 units; the cost to build digital transmission facilities for Oregon Public Broadcasting; a study and engineering work to widen and deepen the shipping channel at the Port of Coos Bay; and deferred building maintenance on seven Oregon University campuses.

Veterans Affairs plans bond sale

Next, the Oregon Department of Veterans Affairs plans to price $50 million general obligation bonds the week of June 2, Groth said.

The series 90A bonds will price in a negotiated sale managed by JPMorgan Securities.

Proceeds will be used for veterans' home loans.

The Oregon State Board of Higher Education plans to price $200 million G.O. bonds on June 16, according to a sales calendar.

The series 2008A bonds will price for the University of Oregon.

Citigroup Global Markets will manage the negotiated sale.

Proceeds will be used for an arena at the university.

Also in June, the state expects to price $750 million short-term state tax anticipation notes on June 23.

The series 2008A notes will price for cash flow management purposes, Groth said.

Bank of America is the senior manager of the negotiated sale.

Later, the state intends to price about $100 million certificates of participation the week of July 2. The final amount will depend on the number of projects that need funding, Groth said.

Texas Municipal Gas considers exchange

Texas Municipal Gas Acquisition and Supply Corp. II is considering an exchange offer on its $516.175 million series 2007A and $1.418 million series 2007B gas supply revenue bonds, according to a company release.

The Houston-based corporation will evaluate whether to restructure the bonds to a fixed rate.

A majority of bondholders must provide consent to complete the restructuring.

The company plans to determine whether to solicit consents and pursue the exchange within the next 60 days.

Palmetto Health to price, convert

Palmetto Health in South Carolina plans to price $97.185 million variable-rate refunding bonds on June 12, according to information released in a preliminary reoffering circular.

The sale will include $47.915 million series 2008A and $49.27 million series 2008B bonds, according to the remarketing circular for Palmetto Health's series 2005A bonds.

The series 2008 bonds will price simultaneously with the remarketing and conversion of the $205.825 million series 2005A bonds to a fixed rate.

Proceeds will be used to prepay a taxable loan that was used to redeem the series 2005B bonds and to purchase about $50 million of the outstanding series 2007 hospital improvement revenue bonds.

New York housing agency plans bonds

Moving to other sales ahead for the week of May 19, the New York State Housing Finance Agency plans to price $149 million in personal income tax notes Wednesday, said a calendar of upcoming sales.

The bonds (/AAA/) will be sold on a negotiated basis with Citigroup Global Markets as the senior manager.

The bonds are due 2018 to 2038.

Of the total amount, $39 million is taxable.

The full details of the sale were not immediately available Friday.

Tampa Bay Water sells $103 million

Also ahead in the week, the Tampa Bay Water Authority of Florida intends to sell its previously announced $103.67 million in series 2008 utility system revenue bonds Wednesday, according to a calendar of deals.

The bonds (Aa3/AA+/AA) will be sold through senior manager Raymond James. The bonds are due 2032 through 2038.

Proceeds will be used to pay for a portion of project costs, which includes increasing the hydraulic capacity at pump stations, and to fund a deposit to the reserve account.

Riverside County Transportation Commission plans bonds

The Riverside County Transportation Commission in California plans to price $127.66 million sales tax revenue bonds with an initial long-term interest rate on May 28, a source with the issuer said Friday.

The series 2008 bonds (Aa2/AA+/AA) mature June 1, 2029.

The bonds have an initial mandatory tender date of Dec. 1, 2009.

Lehman Brothers is the senior manager of the negotiated sale.

Proceeds will be used to refinance the commission's outstanding $110.005 million series 2005A and B commercial paper notes and to fund capitalized interest on the series 2008 bonds.

Maryland Community Development to price bonds

The Community Development Administration at the Maryland Department of Housing and Community Development expects to price $60 million residential revenue bonds the week of June 2, a source with the issuer said Friday.

The series 2008 bonds have maturities from 2009 through 2017.

Morgan Stanley is the senior manager of the negotiated sale.

Proceeds will be used to purchase mortgage loans and to refund a portion of draw down bonds.

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