Billions in sales planned for coming week; Catholic Health to convert or refund auction-rate bonds

By Cristal Cody and Sheri Kasprzak

New York, April 25 - Despite whispers in the marketplace about issuers postponing sales due to sour market conditions, billions of dollars in sales are expected this week. One market source told Prospect News Friday that conditions may not be as bad as people have been saying.

"It really depends on the offering and what the issuer is looking for," said the sell-side market source.

"I don't think things are that bad. Obviously, there are a lot of variables. I think if an issuer has a reasonably good rating and their books look good, there's no reason they can't price well right now. Most issuers are more concerned about getting their bonds priced and getting their projects done than anything, but there are some issuers who just can't get it done where they're comfortable."

The treasurer of Ohio told Prospect News earlier this week that the state's $140 million sale of general obligation bonds went very well, with the bonds pricing at a 3.39% all-in cost.

Even so, auction-rate bonds continue to plague some issuers.

Catholic Health Initiatives in Denver announced its plans to convert or refund $896.2 million of its auction-rate securities Friday.

The healthcare provider had about $1 billion in outstanding auction-rate bonds as of March 1 and plans to convert or refund and retire the remaining $105 million in the fall, a notice of conversion said.

The auction-rate bonds that will be converted or refunded include series 1995C revenue bonds sold through the Nebraska Health Facilities and the Hospital Authority No. 2 of Douglas County; series 1995C revenue bonds sold through the Oregon Health Facilities and the Hospital Facility Authority of Ontario; series 1995C revenue bonds sold through Garden City, Kansas, and the Kansas Health Facilities; series 1995C revenue bonds sold through the city of Williston, N.D., and the North Dakota Health Facilities; series 1997A and B Catholic Health Initiatives composite issue; series 2000A and B Catholic Health Initiatives composite issue; series 2002A and B Catholic Health Initiatives composite issue; series 2004A, B, C and D Catholic Health Initiatives composite issue; series 2006A, B and C Catholic Health Initiatives composite issue and series 2007A Catholic Health Initiatives bonds.

Orlando-Orange County bonds set

Looking at the crowded calendar of deals set for the coming week, the Orlando-Orange County Expressway Authority in Florida is expected to price $499.105 million in series 2008B variable-rate revenue refunding bonds Monday.

The sale includes $131.025 million in series 2008B-1 bonds (//AAA/F1+), $118.5 million in series 2008B-2 bonds (//AA+/F1+), $149.76 million in series 2008B-3 bonds (//AA+/F1+) and $99.82 million in series 2008B-4 bonds (//AA+/F1+).

The bonds will be sold on a negotiated basis with Bank of America as the manager for the series 2008B-1 bonds, SunTrust Bank as the manager for the series 2008B-2 bonds and Wachovia Bank as the manager for the series 2008B-3 and 2008B-4 bonds.

The bonds will initially bear interest at the weekly rate but may be subject to conversion to other modes.

Proceeds will be used to construct roads and refund existing bonds, according to a statement from the issuer.

North Carolina Eastern to price

Also coming up, the North Carolina Eastern Municipal Power Agency intends to sell $430.855 million in power system revenue bonds Tuesday, a calendar of sales said.

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

The offering includes $357.675 million in series 2008A bonds and $73.18 million in series 2008B taxable refunding bonds.

The bonds are due in a serial structure from 2013 to 2024.

Proceeds from the deal will be used to refund the agency's series 2004A, 2004B, 2006B and 2007A auction-rate and weekly rate bonds.

University of Miami on Wednesday

On Wednesday, the University of Miami expects to sell $347 million in series 2008 revenue bonds on Wednesday, according to a calendar of upcoming deals.

The bonds (A2/A-/) will be sold on a negotiated basis with Morgan Stanley as the lead manager.

The offering includes $307 million in series 2008A bonds and $40 million in series 2008B bonds.

The bonds will be sold through the Miami-Dade County Educational Facilities Authority.

The proceeds will be used to finance or refinance a portion of the funds used to acquire the Cedars Medical Center at the University of Miami complex. The rest of the proceeds will be used for renovations at the hospital.

Also coming up, the Texas Children's Hospital expects to price $300 million health care revenue bonds on Wednesday, according to Moody's.

The $100 million series 2008-1, $100 million series 2008-2 and $100 million series 2008-3 bonds (Aa2/VMIG 1//) will price through the Harris County Health Facilities Development Corp.

Texas Children's Hospital has a long-dated swap on the series 2007 bonds, which will be kept to synthetically hedge the interest rates on the Series 2008 bonds.

JPMorgan will manage the negotiated sale.

Proceeds will be used to refund the series 2007-1, 2007-2 and 2007-3 auction rate bonds.

Redding to sell bonds

On Tuesday, Redding, Calif., will sell $168 million in electric system revenue certificates of participation Tuesday, a calendar of upcoming deals said Friday.

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

The FSA-insured bonds are due from 2009 to 2027 with a term bond due 2030.

The city plans to use the proceeds to finance the cost of acquiring and constructing a 45 megawatt natural gas generator at the Redding Power Plant, refund a portion of its series 2002A certificates of participation for savings, refund its series 2002C-1 and 2002C-2 auction-rate certificates, make swap termination payments and fund a debt service reserve.

Lake Worth bonds to price

In other upcoming sales, the Lake Worth Utility System in Florida plans to price $66 million on Thursday, according to a release from Moody's Investors Service. The pricing date could not be confirmed with the issuer by press time Friday.

The series 2008 refunding and improvement revenue bonds (A2//) will be sold in a private placement to Banc of America Public Capital Corp. and SunTrust Equipment Finance and Leasing Corp.

The University of Akron in Ohio plans to price $130.855 million general receipts refunding bonds, according to a preliminary official statement.

The $65.485 million series 2008C1 bonds and the $65.37 million series 2008C2 bonds initially will price with a weekly interest rate.

The bonds, due Jan. 1, 2029, are insured by Assured Guaranty.

Morgan Stanley will manage the negotiated sale.

Proceeds will be used to refund the university's series 2004 general receipts refunding bonds

Chicago BOE sells $464.66 million

Chicago's Board of Education priced $464.655 million unlimited tax general obligation refunding bonds with a 4.838405% true interest cost, the issuer said Friday.

The series 2008C bonds (A1/AA-/A+) priced Thursday with 4.25% to 5.25% coupons to yield 3.92% to 4.92%, said Sandra Deangelus, debt manager.

The bonds have serial maturities from 2017 through 2029 and a term bond due 2032.

The 2027 maturity and the term bond are insured by Financial Security Assurance.

"That's how we structured the deal. We were hoping to test the insured appetite," she said. "In light of the market, we just chose to pick a couple maturities to offer insurance where we thought it would be the most attractive."

Lehman Brothers is the senior manager of the negotiated sale.

Proceeds will be used to refund the board's outstanding $481 million series 2003B1, B2 and B3 general obligation bonds and series 2004B1, B2, B3 and B4 general obligation refunding bonds.

Elsewhere, the California Infrastructure and Economic Development Bank priced $59.565 million lease revenue refunding bonds with 3% to 5% coupons, according to pricing details released Friday.

The series 2008 Oakland Unified School District state school fund apportionment lease revenue bonds (A3/A/A-) priced Thursday to yield 2.35% to 4.84%.

The bonds have serial maturities from 2009 through 2018 and 2022 to 2023 and a term bond in 2021.

Banc of America Securities LLC was the senior manager of the negotiated sale.

Proceeds will be used to refund the Oakland Unified School District series 2005C lease revenue bonds.

© 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.