Market conditions improve on job data; Texas' Carrollton-Farmers Branch school district prices $57.435 million

By Cristal Cody and Sheri Kasprzak

New York, May 8 - As market conditions improved, more issuers crawled out of the woodwork Thursday with offerings planned for May and June.

One sellside market source said Thursday afternoon that municipals have been improving, mainly because of Treasuries.

"Treasuries are up on jobs data and munis are following," he said. "Things are getting better. The market is definitely looking better than it has over the past few weeks."

Meanwhile, pricing action Thursday remained heavy, led by a $57.435 million offering of bonds from the Carrollton-Farmers Branch Independent School District in Texas with a 4.124% true interest cost, the district's financial adviser told Prospect News.

The series 2008 unlimited tax school building and refunding bonds (Aaa/AAA/) priced with 4% to 5% coupons to yield 2.05% in 2009 to 4.763% in 2033, said David Medanich, vice chairman of First Southwest Co.

"This is better than what we thought it was going to be," he said. "We were very pleased with the market today and very pleased we got 14 bidders. I think that says a lot."

Merrill Lynch & Co. was the winning bidder in the competitive sale.

Bidders included "all the players" such as RBC Capital Markets, JPMorgan, Morgan Stanley and Prager, Sealy & Co., Medanich said.

"The closest [true interest cost] bid was 4.2156%," he said.

About $30 million of the proceeds will finance construction of new school facilities, and the remainder will be used to refund the district's series 1998 refunding and school buildings bonds and series 1998 school building unlimited tax bonds, he said.

The Placentia-Yorba Linda School District in California priced $80 million general obligation bonds on Thursday, a source said.

The series 2008A bonds (Aa3//) priced in a negotiated sale managed by George K. Baum & Co.

Pricing details are expected to be available on Friday.

Proceeds will be used to update school facilities and to finance new construction projects to accommodate more students.

Sutter Health in California was expected to price up to $300 million series 2008B bonds on Thursday to finance a variety of health-care projects. The hospital now plans to price additional issues, Greg Gonzalez, treasury analyst, said in a brief interview with Prospect News.

Further details were not immediately available.

Morgan Stanley is the senior manager of the negotiated sale.

New Mexico to sell $176.12 million

Moving to the upcoming sales, New Mexico announced plans to price $176.115 million severance tax and refunding bonds in competitive sales on May 20, according to sale notices.

The $156.31 million series 2008A1 severance tax bonds have maturities from 2009 through 2018. The $19.805 million series 2008A2 supplemental severance tax refunding bonds have maturities from 2009 through 2012.

Fiscal Strategies Group is the state's financial adviser.

Proceeds will be used to finance projects and to refund the July 1, 2009 maturity from the series 2003A severance tax bonds and the July 1, 2009 through July 1, 2012 maturities from the series 2002B supplemental severance tax bonds.

Johnston Memorial Hospital Authority in North Carolina plans to price $144.96 million Federal Housing Administration insured mortgage revenue bonds on May 20, a source with the state said Thursday.

The series 2008 bonds (Aaa/AAA/) are insured by Financial Security Assurance.

The state coordinates the sale of all public debt in North Carolina.

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

Proceeds will be used to repay $21.69 million of prior debt and to pay the costs to expand and renovate health-care facilities, including construction of an outpatient medical center to replace the Summit Surgical Center and extensive renovations to add about 150,600 square feet to the existing hospital facilities at the Smithfield campus.

Roseville, Calif., expects to price $155 million electric system revenue refunding certificates of participation on Tuesday, the issuer told Prospect News.

The $90 million series 2008A and $65 million series 2008B electric system revenue refunding certificates of participation (/A-1/) will price with a weekly interest rate, said Monty Hanks, investment analyst for the city.

Morgan Stanley is the manager of the negotiated sale.

"It's a done deal going through because we have to get out of these auction-rate notes," Hanks said. "We are moving them to a variable rate."

Proceeds will be used to refinance and convert the $90 million series 2005B auction-rate electric system certificates of participation on Tuesday and $63 million series 2005C certificates on May 15 and to pay costs to terminate the 2005 swap agreement.

William Paterson University to price bonds

In other upcoming sales, William Paterson University in New Jersey plans to price $90 million in series 2008C revenue bonds on June 4, a source familiar with the sale told Prospect News Thursday.

The bonds (A2//) will be sold through the New Jersey Educational Facilities Authority and will be sold on a competitive basis with Public Financial Management as the financial adviser.

Proceeds will be used to construct an addition to the university's science building and to renovate the existing building. Some of the proceeds will refund the university's series 1998D bonds.

Elsewhere, Suffolk County in New York plans to price $69.4 million in series 2008A public improvement general obligation bonds on May 20, a source connected to the deal said.

The bonds (Aa3//AA-) are due 2009 to 2028 and will be sold on a competitive basis.

The proceeds from the deal will be used to fund capital improvement projects in the county.

Boston University to price bonds

The Massachusetts Development Finance Agency intends to price $485.945 million Boston University issue variable-rate demand revenue bonds, according to a preliminary official statement.

The sale includes $50 million series U1 bonds, $50 million series U2 bonds, $50 million series U3 bonds, $41.7 million series U5A bonds, $43.6 million series U5B bonds, $62.52 million series U6A bonds, $62.72 million series U6B bonds, $52.5 million series U6C bonds, $10.2 million series U6D bonds and $62.705 million series U6E bonds.

The series U1, U2 and U3 bonds initially will price with a weekly interest rate and will mature Oct. 1, 2040.

The series U5A and U5B bonds will price with an initial daily rate and are due Oct. 1, 2031.

The series U6A, U6B and U6C bonds will price with an initial daily interest rate and are due Oct. 1, 2042.

The series U6D bonds will price with an initial daily rate and are due Oct. 1, 2022. The series U6E bonds will price with an initial weekly rate and are due Oct. 1, 2042.

Lehman Brothers is senior manager of the negotiated sale. Goldman, Sachs & Co. will manage the series U6B bonds.

Proceeds will be used to finance construction of a new dormitory, to acquire property to house medical students, to renovate the central heating and cooling plant, to construct new buildings for the law school on the Charles River Campus and for renovations to the College of Fine Arts building.

In other upcoming sales, the Sisters of St. Francis Health Services Inc. plans to price $162.96 million bonds on May 12, according to a release from Moody's Investors Service.

The $81.66 million series 2008A bonds and $81.3 million series 2008B variable-rate demand bonds (Aa3//) will price through the Indiana Finance Authority.

The system also plans to price $125 million of additional debt this year.

Calls for additional information were not immediately returned.

The Maine Health and Higher Educational Facilities Authority plans to price $133.08 million reserve fund resolution bonds (Aa3//) in May and June, according to Moody's.

The authority is expected to price $107.14 million series 2008A variable-rate revenue bonds on May 15 and $25.94 million series 2008B bonds on June 17.

Cain Brothers and Lehman Brothers are the underwriters.

Proceeds will be used to refund auction-rate securities of Maine Medical Center.

The Sisters of Mercy Health System plans to price $109.675 million variable-rate demand obligation refunding revenue bonds on May 21, a source said Thursday.

The series 2008A, B and C bonds (Aa2/VMIG 1) will price through the Missouri State Health and Educational Facilities Authority.

The series 2008A and B bonds initially will price with a daily interest rate, and the series 2008C bonds initially will price with a weekly rate.

Bear, Stearns & Co. is the underwriter.

Proceeds will be used to refund the outstanding $108.9 million series 2004A, B and C auction-rate bonds.

In other news, the state of California plans to price some general obligation bonds in June, but the exact amount has not been determined at this time. No additional information was available by press time on the sale.

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