Barrage of pricings led by $359.165 million from Sacramento

By Cristal Cody and Sheri Kasprzak

New York, April 1 - A flood of pricing activity set the tone for the day in municipals Tuesday, led by a $359.165 million offering of taxable floating-rate pension funding bonds from Sacramento County in California.

The market was also hit with another wave of call notices and auction bid notices from a variety of issuers as the aftershocks of the auction-rate crisis are still being felt.

Nonetheless, market conditions have caused more than one issuer in the past couple of weeks to hold off on pricing deals. Most recently, the Howard Hughes Medical Institute said it would postpone $76.5 million in series 2008B variable-rate bonds until May 15, the issuer told Prospect News. The bonds will be sold through the Maryland Economic Development Corp. and had been set to price Tuesday.

Bank of America is the remarketing agent.

"We held off because of the disruption in the market," said Ed Palmerino, vice president for finance and treasurer.

Proceeds will refinance the corporation's series 1990 bonds.

Heading back to the auction-rate crisis, Pasadena in California said it will call $135.5 million of its series 2006B auction-rate certificates of participation on April 29, a notice said Tuesday.

The city said it will sell series 2008A variable-rate refunding bonds to refund the 2006B bonds, but the terms of the sale have not been determined yet.

Banc of America Securities is the lead manager for the deal.

Elsewhere, the Halifax Hospital Medical Center plans to make bids on $70 million in series 2006B-2 hospital revenue bonds on April 3, according to a notice released Tuesday.

The medical center will submit a bid at the auction of the bonds, which are due 2046. Once the bid has been submitted, the city will continue to make bids to purchase the bonds until it owns all of the bonds.

The designated rate for the April 3 auction is 2.71%, the notice said.

Citigroup Global Markets is the broker-dealer.

Issuers bid on own bonds

Other issuers also announced plans to bid on their own bonds in an effort to escape high auction interest rates.

The Government Development Bank for Puerto Rico plans to submit bids on $150 million auction-rate improvement refunding bonds.

The bank will bid on $50 million sub series 2007A-7 improvement refunding bonds due July 1, 2033 in Thursday's upcoming auction.

The bank intends to submit interest rate bids no lower than 2.75%.

In the auction held March 27, the bonds had a low bid of 5% and a high bid of 11.21%, according to a notice.

The bank also plans to submit bids on $50 million series 2007A-6 improvement refunding bonds in an auction on April 7, as well as $50 million in series 2007A-9 bonds due July 1, 2034 in an April 8 auction.

The series 2007A-6 bonds, due July 1, 2033, had a low bid of 5.5% and a high bid of 7.5% in the auction held Friday.

The series 2007A-9 bonds had a 5.49% low bid and a 10% high bid in the auction held Tuesday.

Citizens Property Insurance Corp. in Jacksonville, Fla., also intends to bid on $675 million high risk account senior secured auction-rate bonds, according to a notice released Tuesday.

The company expects to submit bids on $300 million series 2004I, 2006A-7 and 2006A-8 bonds in auctions on Thursday.

Citizens Property also will submit bids on $100 million series 2006A-9, $100 million series 2006A-10 and $175 million series 2006A-19 bonds in auctions on April 4.

The company expects to bid at interest rates no less than 3.7%.

Sacramento's bonds

Moving back to the pricing news Tuesday, Sacramento County priced $359.165 million in taxable floating-rate pension funding bonds at the one-month Libor index rate plus, said Chris Marx, the county's debt officer.

The series 2008 bonds (Aaa/AAA/AAA) priced Friday with term bonds due 2026 and 2030. The 2026 bond priced at Libor plus 130 basis points and the 2030 bonds priced at Libor plus 145 basis points, Marx said.

"We retained our 15% interest rate cap on both," she said.

"We pay a fixed rate on a swap of 5.9%, and we receive 100% of Libor. We synthetically fixed it using the existing swap and matched the two variable pieces at 100% of one-month Libor. That was really our goal."

The bonds are insured by Financial Security Assurance.

Morgan Stanley managed the negotiated sale.

Proceeds will be used to refund the $346.8 million outstanding principal of the county's series 2004 C-1 bonds.

OakBend, Providence Health price bonds

In other active pricing news, OakBend Medical Center in Richmond, Texas, priced $75.5 million variable rate hospital bonds with a 1% initial rate, the issuer said Tuesday.

The series 2008 bonds (A1/VMIG 1) initially will bear interest in a daily rate mode, said Susan Carruth, chief financial officer.

The bonds are due Dec. 1, 2038.

Morgan Keegan & Co. managed the negotiated sale.

Proceeds will be used for new construction and to refund old debt.

Providence Health and Services in Washington priced $200 million series 2008 taxable commercial paper notes on Tuesday, the issuer told Prospect News.

Final pricing terms were still being completed late afternoon, said Sue Painter, chief investment officer and treasurer.

"We're in the process of locking down rates," she said.

The notes (P-1) may be long dated to six to nine months, Painter has previously said.

Merrill Lynch & Co. managed the negotiated sale.

Proceeds will be used to redeem series 2006 F and G taxable auction rate securities.

The Metropolitan Sewerage District of Buncombe County, N.C., priced $33.635 million revenue refunding bonds with a 1.8% initial rate, the issuer said Tuesday.

The series 2008A bonds (Aa3/AA/AA) priced Monday with a weekly interest rate, said Scott Powell, finance director.

The bonds are due July 1, 2031.

Banc of America Securities managed the sale.

The district also expects to price $22.165 million series 2008B bonds due July 1, 2029 on April 30.

Proceeds will be used to refund the district's outstanding series 2004 revenue bonds and series 2005 revenue refunding bonds.

The district refunded the bonds without insurance from XL Capital Assurance because it was requiring a premium of 300 basis points, he said.

Judson ISD, Paradise Valley bonds price

In other news, the financial advisors for Judson Independent School District in Texas and the Paradise Valley Unified School District No. 69 in Arizona confirmed their respective offerings priced Tuesday.

The Judson Independent School District priced $71.32 million in series 2008 unlimited tax school building bonds (A1//A+) on a negotiated basis through lead manager RBC Capital Markets.

The maturities have changed, according to the financial advisor. The bonds are now due from 2009 to 2028 with term bonds due 2032 and 2037.

Proceeds will be used to construct a replacement high school and elementary school, technology and renovations at district schools.

The terms were still being finalized at press time Tuesday.

Also on Tuesday, the financial advisor for Paradise Valley USD said its $77.2 million offering of school improvement and refunding bonds (/AA-/) priced on Tuesday, but the terms were not immediately available.

The bonds were sold through lead manager Piper Jaffray and proceeds will be used to construct an elementary school, conduct capital improvements and refund part of the district's outstanding bonds.

Unconfirmed sales

Several issuers were expected to price bonds Tuesday, but the sales could not be confirmed by press time.

American Municipal Power-Ohio Inc. planned to price $450 million revenue bond anticipation notes.

The series 2008 Prairie State Project notes (MIG 1) have a one-year maturity no later than April 1, 2009.

The power company will use the notes to refund $204 million commercial paper notes, which were used to finance a 23.26% ownership interest in the Prairie State Project. The proceeds also will fund a $248 million Prairie State obligation through March 15, 2009.

Hidalgo County Drainage District No. 1 in Edinburg, Texas was expected to price $72 million unlimited tax improvement bonds in a competitive sale.

The series 2008 bonds have serial maturities from 2010 through 2028.

Proceeds will be used for drainage improvements and to acquire the rights-of-way.

The Development Authority of Richmond County in Georgia planned to price $135 million revenue bonds.

The $85 million series 2008A bonds (Aaa/AA/-) and $50 million series 2008B bonds (Aa1/A+/-) will price for MCGHealth with a weekly interest rate.

UBS Investment Bank is the underwriter.

Proceeds will be loaned to MCGHealth to finance the costs of acquisition and construction on the health care group's Augusta, Ga., medical campus.

Pennsylvania State University also intended to price $83.075 million bonds (A2) on Tuesday.

The university will price $75.16 million public higher education revenue series 2008A bonds and $7.915 million series 2008B revenue bonds.

Lehman Brothers is the underwriter.

Baylor University in Texas also had been scheduled to price $115 million bonds on Tuesday. The series 2008C tax-exempt fixed rate bonds (/AA-/AA-) are planned to price through the Waco Education Finance Corp.

Lehman Brothers is the senior manager.

California to price $1.75 billion

Looking to upcoming sales, the state of California said it will sell $1.75 billion in general obligation bonds on April 10, according to a calendar of offerings the state released.

The bonds (A1/A+/A+) will be sold on a negotiated basis with Morgan Stanley as the senior manager. The co-managers are E.J. De La Rosa & Co., J.P. Morgan Securities and Merrill Lynch.

The sale is expected to close on April 17.

Proceeds from the deal will be used for various capital improvement projects.

Elsewhere, the Dormitory Authority of the State of New York will sell $290 million in series 2008A revenue bonds on April 9, a preliminary official statement released Tuesday said.

The bonds will be sold on a negotiated basis through lead manager Morgan Stanley. The co-managers are Banc of America Securities; Goldman, Sachs & Co.; JPMorgan; Lehman Brothers; Ramirez & Co.; Roosevelt & Cross Inc.; and Siebert Brandford Shank & Co.

The bonds will be term bonds, but the maturities have not been set.

Proceeds from the offering will be used for the design, renovation and construction of improvements to a library, faculty house, faculty office space and several halls on the Columbia University campus.

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