Portland, Ore., leads pricing news with $554.12 million revenue bond sale; conversions, pricings taper off

By Cristal Cody and Sheri Kasprzak

New York, April 3 - As the week winds to a close, pricing action and conversion notices slowed substantially Thursday.

One market insider chalked the reduction in new issue news and conversion news up to a normal lull often seen at the end of the week.

"It's just normally this way near the latter part of the week," said one sell-sider.

"I don't think it's any indication that there's less interest in munis, necessarily. As for conversions, I'm sure we'll see more. I think issuers are still figuring out how to handle their ARS [auction-rate securities]."

Meanwhile, new deal activity on Thursday was led by a $554.12 million offering of series 2008 revenue bonds from Portland, Ore.

The city sold $339.89 million in series 2008A first-lien sewer system revenue bonds (A1/AA-/) with a 4.3675% true interest cost.

Lehman Brothers came away with the competitive bid win for the series 2008A bonds after the city favored it over a bid from Merrill Lynch with the same TIC, a source at the issuer told Prospect News Thursday afternoon.

"We were just more satisfied with the other terms Lehman came up with," said the source, who asked not to be identified.

The series 2008A bonds are due from 2009 to 2032 with a term bond due 2033. The bonds have a 5% coupon and are all priced at par, according to a term sheet released by the issuer.

The bid for the series 2008B bonds (A1/AA-/) was won by Citigroup Global Markets, which came with a 4.6087% TIC.

The 2008B bonds are also due 2009 to 2032 with a term bond due 2033. The bonds all have a 5% coupon and all are also priced at par.

The deal is set to close April 7.

Johnson County bonds price

In other pricing news Thursday, Johnson County, Kan., priced $102.995 million bonds in five competitive sales on Thursday, the issuer confirmed in an interview with Prospect News.

The county priced $48.53 million general obligation and refunding bonds, and the Johnson County Public Building Commission priced $54.465 million lease purchase revenue bonds, said Leslie Friedel, county debt coordinator.

"We had a fair number of bids," she said.

"We had a good response on the G.O bonds in particular, but we had good rates on the others."

The county doesn't expect to issue any more debt until in the fall, she said.

The $28.545 million series 2008A general obligation bonds priced with a 4.4% true interest cost. The bonds priced with 4% to 5% coupons to yield 2.05% to 4.89%.

The bonds have maturities from 2009 through 2028.

The $18.575 million series 2008B refunding bonds priced with a 2.89% true interest cost.

The bonds were sold with coupons from 4% to 5% to yield 2% to 3.75%.

The $1.41 million series 2008C library refunding bonds priced with a 3.31% true interest cost.

The bonds priced with 3.5% to 3.875% coupons to yield 2% to 3.73%.

The refunding bonds have maturities from Sept. 1, 2008, through Sept. 1, 2017.

Harris NA was the winning bidder in the competitive sale for the series 2008A and C bonds, Friedel said.

Wachovia Bank was the successful bidder on the series 2008B bonds.

The $48.825 series 2008A lease purchase revenue bonds priced with a 4.526% true interest cost.

The bonds priced with 4% to 5% coupons to yield 2.03% to 4.999%.

Morgan Keegan & Co. was the winning bidder.

The $5.64 million series 2008B bonds priced with a 4.38% true interest cost in a sale won by Wachovia Securities.

The bonds priced with 4% to 4.75% coupons to yield 2.1% to 4.875%.

The lease revenue bonds have serial maturities from 2009 through 2028.

Proceeds will be used to partially refund series 1996, 1997 and 1998 county bonds and for wastewater and airport projects.

Western Michigan prices $123.765 million

Western Michigan University also priced $123.765 million general revenue bonds with a 4.78% true interest cost on Thursday, the issuer told Prospect News.

The series 2008 bonds (Aaa/AAA/) priced with 3% to 5% coupons to yield 2.2% to 5%, said Lori Prichard, assistant director of accounting services.

The bonds have maturities from 2009 through 2023 with term bonds in 2028 and 2032. The bonds are insured by Financial Security Assurance.

Lehman Brothers managed the negotiated sale.

Proceeds will be used to refund the university's series 2000 and series 2002A general revenue bonds. The proceeds also may be used to pay the cost of terminating swaps for the series 2000 and series 2002A bonds.

Michigan leads upcoming sales

Looking at upcoming offerings, the State of Michigan plans to sell $233.47 million in general obligation bonds April 8, a preliminary official statement said Thursday.

The offering includes $200.56 million in series 2008A environmental program and refunding general obligation bonds, $19.355 million in series 2008B environmental program and refunding G.O.s, $12.145 million in series 2008C environmental program general obligation refunding bonds and $1.41 million in series 2008D environmental program general obligation refunding bonds.

The maturities have not been set.

The bonds (//AA-) will be sold on a negotiated basis through lead managers Bear, Stearns & Co. and JPMorgan. The co-managers are Depfa First Albany Securities, Fidelity Capital Market Services, Fifth Third Securities, Loop Capital Markets and Wachovia Securities.

Proceeds will be used for environmental programs throughout the state.

Cornell to bring $130 million

Elsewhere, Cornell University confirmed its plans to price $130 million revenue bonds on April 10, the issuer said Thursday.

The bonds (Aa1/AA+/) will price as variable daily interest rate through the Dormitory Authority of New York, said Carolann Saggese, director of debt.

The $65 million series 2008B and $65 million series 2008C bonds are due July 1, 2037.

Goldman, Sachs & Co. will manage the series 2008B bonds, and JPMorgan will manage the series 2008C bonds.

Proceeds will be used to refinance the university's series 1998 commercial paper notes.

The university also plans to reoffer $90.15 million bonds as weekly variable interest rate bonds and option bonds.

The $44.05 million series 2004A bonds will be reoffered on April 8.

The $46.1 million series 2004B bonds will be reoffered April 10.

The bonds are due July 1, 2033.

Morgan Stanley is the reoffering agent.

In other news, the Maine Municipal Bond Bank plans to price $51.975 million bonds in retail and institutional sales.

The retail period for the $5.485 million series 2008A bonds and $43.59 million series 2008B bonds will start April 11.

The institutional pricing will be held April 15, a source said.

The series 2008A bonds have serial maturities from Nov. 1, 2008 through Nov. 1, 2019, and the series 2008B bonds have maturities from Nov. 1, 2009, through Nov. 1, 2028 with term bonds due 2031 and 2038.

UBS Investment Bank is the senior manager, and co-managers are Citi and Wachovia Bank.

Proceeds will be used to purchase $50.409 million municipal bonds from 15 towns, cities, schools and water and sewer districts.

Intermountain Power to sell $450 million

Finally, the Intermountain Power Agency in Utah is expected to price $450 million in series 2008A subordinate power supply revenue refunding bonds April 20, a statement from Moody's Investors Service said.

The actual pricing date could not be confirmed with the issuer by press time Thursday evening.

The bonds (A1//) will be sold on a competitive basis and the proceeds will be used to refund the agency's series 1998A, 2004A, 2006A and 2006B bonds.

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