Austin sets terms on $172.6 million GOs; Glendale prices $110 million in water, electric revenue bonds

By Cristal Cody and Sheri Kasprzak

New York, Feb. 5 - Heading up municipals offerings Tuesday was $172.6 million in general obligation public improvement bonds from Austin, Texas, which benefited from a rally in the market that provided the city with a 5.17% present value savings.

The series 2008 limited tax bonds (Aa1/AAA/AA+) priced with coupons from 3.5% to 5%, and yields from 1.65% to 3.87%, said Chris Allen, senior managing consultant with Austin's financial advisor, Public Financial Management. The bonds had a 3.36% true interest cost.

The city was looking for a savings of 4.25% before it sold the bonds.

"They were able to meet that. They actually got 5.17% present value savings," Allen said. "There was a rally in the market."

The bonds have serial maturities from Sept. 1, 2008 through 2021. Lehman Brothers is managing the negotiated sale.

Proceeds will be used to refund a portion of outstanding debt.

Glendale prices water, electric bonds

Also priced Tuesday were $110 million in two bonds from Glendale, Calif.

The city priced $60 million in electric revenue bonds (Aa3/A+/A+) and $50 million in water revenue bonds (Aa3/A-/A).

The bonds priced with coupons from 4% to 5% with yields from 3.4% to 4.7% and a true interest cost of 4.634%. The bonds have maturities from 2018 to 2038.

Morgan Stanley won the competitive bid.

The city also priced $50 million in water revenue bonds (Aa3/A-/A) with coupons from 2.95% to 5% and yields from 2.65% to 4.57%. The bonds priced in a serial structure from 2013 to 2038 and a true interest cost of 4.4904%.

Piper Jaffray won the competitive bid on the water tranche.

Proceeds from the electric revenue bonds will be used for improvements to the city's electric system and the water revenue bonds will be used for improvements to the city's water system.

In other news, Gainesville, Fla., had planned to price $195 million in bonds Tuesday.

The bonds included $105 million in series 2008A utilities system revenue bonds (Aa2) and $90 million in series 2008B variable-rate utilities system revenue bonds (Aa2).

Proceeds from those bonds will be used to fund projects like a new energy facility and a biosolids program.

The full terms of the bonds were unavailable by press time Tuesday.

Texas City schools bringing bonds

Looking ahead, the Texas City Independent School District plans to price $54.945 million unlimited tax school building bonds on Monday as the first installment of $122.51 million bonds authorized by voters, the district's financial advisor said Tuesday.

After this sale, the Galveston County, Texas, school district will have $67.567 million bonds remaining to be sold.

"We're probably going to be coming back to the market every year close to this time for the next two years," said Ryan O'Hara, a director of RBC Capital Markets in Houston.

The series 2008 bonds have serial maturities from 2009 through 2030.

Southwest Securities is the lead manager of the negotiated deal, with UBS Investment Bank, Morgan Keegan & Co., First Southwest Co. and Banc of America Securities LLC as co-managers.

Proceeds will be used to acquire, construct and equip school buildings and renovate district facilities.

Three bonds to price Wednesday

For Wednesday, three offerings are on the calendar to price, led by a $174.135 million offering of general obligation justice system facility bonds series 2008 and supplemental B interest-registered coupons from Denver, Colo.

The bonds (Aa1) are being sold on a competitive basis and the proceeds will be used for jail and courthouse improvements.

Also expected to price Wednesday are $150 million in variable-rate water and sewer revenue bonds series 2008A-1 and series 2008A-2 (Aa3) from JEA Water & Sewer Enterprise in Florida.

Morgan Stanley is the lead manager for the negotiated offering. The bonds will be due in a serial structure from 2010 to 2042 and the proceeds will be used for extensions and improvements to the water and sewer system.

Dartmouth College also plans to price $75 million in series A short-term commercial notes (P-1) on a negotiated basis through lead manager Lehman Brothers.

Proceeds will be used for a bridge financial for capital projects and general capital needs.

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