Empire State Development brings $672.1 million; University of Pennsylvania Health sells $200 million

By Sheri Kasprzak

New York, Nov. 5 - The election results were finally in on Wednesday and the muni market settled back down to work, with a flurry of pricings conducted.

The heavy pricing action Wednesday was led by a $672.1 million offering of series 2008 building aid revenue bonds from the Empire State Development Authority in New York. Elsewhere, a flood of issuers brought billions of dollars in bonds to the table.

Some issuers said they were concerned about how Election Day would impact their sales.

Keith Casper, chief financial officer for the University of Pennsylvania Health System, said he had been worried about how Election Day would affect the system's $200 million revenue bond sale but was pleased with the results Wednesday.

Casper said his sale was particularly popular on the long end, as yield-hungry institutions went for bonds with a 20-year term.

"It went well," Casper said in an interview Wednesday.

"We had good, strong retail interest, and we sold the longer-term bonds to a large institution. We were really surprised because it went longer than we thought. We didn't have as much interest in the short-term bonds as we did the longer-term bonds. We're happy we were able to sell the full $200 million."

Moving back to the Empire State's bonds, the development authority sold $672.1 million in building aid revenue bonds through lead manager Merrill Lynch & Co.

The bonds (//A+) are due 2012 to 2025 with term bonds due 2026, 2027 and 2028. The serials have coupons from 4% to 5.5% with yields from 3.87% to 5.67%. The 2026 bonds have a 5.625% coupon to yield 5.75%, the 2027 bonds have a 5.625% coupon to yield 5.75%, and the 2028 bonds have a 5.625% coupon to yield 5.75%.

Proceeds from the deal will be used to repay the authority's series 2003A correctional and youth facilities service contract revenue bonds, which are up for mandatory tender Jan. 1, 2009.

University of Penn Health sale

The University of Pennsylvania Health System priced its $200 million in series 2008 revenue bonds Wednesday, Casper said.

The bonds (Aa3) were sold through senior manager Merrill Lynch & Co.

The sale included serial bonds due 2013 and 2018 with term bonds due 2022 and 2026. The 2013 bonds have a 5% coupon, priced at par, and the 2018 bonds have a 5.5% coupon to yield 5.65% The 2022 bonds have a 6% coupon to yield 6.15%, and the 2026 bonds have a 6% coupon to yield 6.3%.

Proceeds from the sale will be used for capital improvements for the health system.

Port of Portland's $130.37 million deal

Elsewhere in Wednesday's pricing action, the Port of Portland in Oregon priced $130.365 million in series 19 revenue bonds, said Martha Richmond, spokeswoman for the port.

The bonds (/AA-/) were sold on a negotiated basis with Goldman, Sachs & Co. and Merrill Lynch as the lead managers.

The bonds are due from 2010 to 2017 with term bonds due 2019, 2021, 2026, 2029 and 2038. The serials have coupons from 4.25% to 5% with yields from 3% to 4.71%. The 2019 bonds have a 5% coupon to yield 5.05%, the 2021 bonds have a 5% coupon to yield 5.25% and the 2026 bonds have a 5.25% coupon to yield 5.45%. The 2029 bonds have a 5% coupon to yield 5.52% and the 2038 bonds have a 5.5% coupon to yield 5.7%.

The bonds feature a call option in 2018 at par.

Proceeds will be used to construct a new port headquarters building, to extend the airport's north runway and for deicing system improvements.

Catholic Health, Chicago bonds priced

In other news Wednesday, sources at Catholic Health Initiatives and the City of Chicago confirmed that their respective bonds priced Wednesday, but noted that the pricing terms would likely be unavailable until later this week.

Catholic Health had been slated to sell $300 million in revenue bonds for the Colorado Health Facilities Authority; Montgomery County, Ohio; and the Educational and Housing Facility Board of the City of Chattanooga, Tenn. The Colorado bonds are due 2014 to 2018 with term bonds due 2022, 2028 and 2034. The Ohio and Tennessee bonds are due 2009 to 2018 with term bonds due 2022, 2028 and 2034.

Proceeds from that sale will be used to finance or refinance capital improvement and equipment acquisitions at Catholic Health facilities in Colorado, Iowa, Nebraska, Minnesota, New Jersey, Oregon, Ohio and Tennessee.

Catholic Health was also scheduled to price $172.485 million in series 2008D revenue bonds (Aa2/AA/AA) for Washington Health Care Facilities.

Those bonds, which were sold through lead manager J.P. Morgan Securities Inc., are due from 2016 to 2018 with term bonds due 2022, 2028 and 2036.

Proceeds will be used to refund and retire series 2007A1, 2007A2 and 2007A3 revenue bonds.

Chicago was set to sell $190 million in series 2008 second-lien wastewater transmission revenue refunding bonds Wednesday. Lisa Schrader, spokeswoman for the city's department of budget and management, said the terms of the sale would not be available Wednesday.

The negotiated bonds (/AAA/A-1/AA-) were sold through lead managers Cabrera Capital Markets and RBC Capital Markets.

Proceeds will be used for improvements and extensions to the city's wastewater transmission system, refunding a portion of the city's outstanding wastewater transmission bonds and a deposit to a debt service reserve fund.

MEAG sale planned

Moving to upcoming offerings, the Municipal Electric Authority of Georgia announced plans Wednesday to price $297.035 million in subordinated bonds.

The sale includes $285.595 million in series 2008D Project One subordinated bonds and $11.44 million in series 2008C general resolution projects subordinated bonds (//A+), said a preliminary official statement.

The offering is expected to price during the week of Nov. 17, an issuer source confirmed with Prospect News Wednesday. The exact pricing date has not yet been determined.

J.P. Morgan Securities is the lead manager for the deal.

Proceeds will be used for refunding outstanding subordinated bonds, to fund the acquisition of nuclear fuel and to fund a debt service reserve account.

Palm Beach solid waste bonds

Also ahead, the Solid Waste Authority of Palm Beach County in Florida is expected to price $343.57 million in series 2008 improvement revenue bonds, said a preliminary official statement.

The bonds (Aa3/AA/) are tentatively scheduled to price Tuesday, said a sellside source reached Wednesday afternoon.

The bonds will price on a negotiated basis with Citigroup Global Markets as the lead manager.

The sale includes $214.875 million in series 2008A bonds and $128.695 million in series 2008B bonds. The 2008A bonds are due 2009 to 2024, and the 2008B bonds are due 2024 to 2028.

Proceeds will be used for the refurbishment of the county's waste-to-energy facility, the design of a new resource recovery facility, the construction of a new transfer station, the acquisition of a landfill site and a deposit to a debt service reserve fund.

Virginia G.O.s ahead

In other upcoming sales, the Commonwealth of Virginia is slated to sell $265.62 million in series 2008B general obligation bonds sometime in November, according to a preliminary official statement.

The bonds will be sold through senior managers Merrill Lynch and BB&T Capital Markets.

The bonds are due 2009 to 2033.

Proceeds will be used for capital projects, like educational, park and recreational facilities, as well as for revenue-producing capital projects at the commonwealth's higher educational institutes. The rest will be used for refunding outstanding obligations.

Connecticut housing deal

Also coming up this month, the Connecticut Housing Finance Authority plans to sell $123.005 million in 2008 housing mortgage finance program bonds, said a preliminary official statement released Wednesday.

The sale includes $110.695 million in series 2008F bonds and $12.31 million in series 2008G bonds. The 2008F bonds include $5.48 million in series 2008F-1 bonds, $100.215 million in series 2008F-2 bonds and $5 million in series 2008F-3 bonds.

The 2008F-1 bonds are due 2009 to 2013, and the 2008F-2 bonds are due 2013 to 2018 with term bonds due 2023, 2028, 2033 and 2038. The 2008F-3 bonds are due 2009 to 2018. The 2008G bonds are due 2011 to 2018 with term bonds due 2023, 2028, 2033 and 2038.

The bonds (Aaa/AAA/) will be sold on a negotiated basis with Merrill Lynch, Citigroup Global Markets and Goldman Sachs as the senior managers.

Proceeds will be used to refund or replace current or future maturities of outstanding bonds, to provide new money for home mortgage purchases and to fund the housing mortgage capital reserve fund.

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