Fort Worth leads Texas schools to market, prices $232.135 million bonds to yield 1.35% to 4.3%

By Cristal Cody and Sheri Kasprzak

New York, Feb. 11 - The week in municipals got off to a rather eventful start with several offerings priced, led by a $232.135 million offering of school building unlimited tax bonds from the Forth Worth Independent School District out of Texas.

The offering was one of several school bonds priced in Texas Monday. The Texas City Independent School District priced $54.945 million in unlimited tax school building bonds and the Port Arthur Independent School District priced $65 million in unlimited tax school building bonds as well.

Also, the Round Rock Independent School District based in Texas announced plans to price $126.36 million in unlimited tax school building bonds Tuesday.

"I don't think there's necessarily a trend," said one sell-sider reached late Monday.

"Texas is a big place and schools are big issuers. They always have projects to complete, so it seems logical."

Moving back to the Forth Worth offering, the bonds (Aaa/AAA) priced in a serial structure from 2009 to 2028 with coupons from 3.125% to 5% and yields from 1.35% to 4.3%, according to David Medanich, vice chairman at First Southwest Co., the financial advisor for the district. The bonds have a true interest cost of 4.105%.

The market is "reasonably calm" at the start of the week, Medanich said.

JPMorgan was the lead manager of the negotiated deal.

The school district plans to use the proceeds to purchase school buses, acquire land and construct and equip school buildings.

Texas school bonds price

Elsewhere, the Texas City Independent School District priced $54.945 million unlimited tax school building bonds on Monday, the financial advisor said.

The bonds priced in a negotiated deal with Southwest Securities as the lead underwriter, said Ryan O'Hara, a director of RBC Capital Markets in Houston.

The bonds were still out in the market, he said, and the final terms were not available by press time.

The bonds have serial maturities from 2009 to 2030.

The sale is the first installment of a $122.51 million bond offering voters authorized last year.

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

Round Rock school plans offering

Looking ahead, the Round Rock ISD said it plans to price $126.36 million unlimited tax school building bonds on Tuesday, according to Tracy Hoke, chief financial officer for the district.

The series 2008 bonds will be sold in a negotiated pricing led by Morgan Stanley.

The bonds have serial maturities from 2009 through 2033, though the underwriters may issue one or more maturities as term bonds.

The proceeds will be used to acquire land, construct and equip buildings and purchase technology equipment for schools in the district, which is located in Williamson and Travis counties.

Erie County Development Agency bonds

Also coming up, the Erie County Industrial Development Agency plans to price $170 million school facility revenue bonds for the Buffalo city school district on Thursday, said David Kerchoff, assistant treasurer for the agency.

The bonds (Aaa/AAA) have serial maturities from 2009 through 2029.

Financial Security Assurance Inc. is the insurer.

Citigroup Global Markets is the lead underwriter of the negotiated pricing.

Proceeds will be used to help finance the third phase of a 10-year comprehensive redevelopment program of Buffalo's public schools.

Florida prices PECO bonds

Earlier, the state of Florida priced $300 million public education capital outlay bonds and plans another sale of $315.4 million lottery revenue bonds later this month.

The full faith and credit series 2007C capital outlay bonds (Aa1/AAA/AA+) priced Wednesday with coupons from 3% to 5% and yields from 1.75% to 4.69%.

The bonds priced with a 4.43% true interest cost in a competitive sale won by Goldman, Sachs & Co., said Tim Tinsley, chief of the state's bond program.

The bonds mature June 1 through 2037.

Proceeds will be used to help pay the cost of capital outlay projects for the state's public education system.

The state also plans to price $315.4 million series 2008A State Board of Education lottery revenue bonds with serial maturities from July 1 to 2027.

"We're just watching it. It's on an 18-hour notice, so at any point in time, we can decide to pull the trigger," Tinsley said.

Part of the proceeds will be used to finance the costs of constructing and renovating schools in the state and to refund a portion of series 1998B lottery revenue bonds.

MTA puts off pricing

In other news, New York City's Metropolitan Transportation Authority has postponed the pricing of its planned $750 million offering of transportation revenue bonds and may even be increasing the size of the deal to $1 billion, according to Jeremy Soffin, spokesman for the MTA.

The deal had been set to price on Monday, but will now price Tuesday.

"There has been no final decision to increase the size to $1 billion," Soffin added in an interview Monday.

"We decided to postpone the deal because we felt we needed more time to prepare."

The authority now intends to sell at least $750 million in transportation revenue bonds on a negotiated basis on Tuesday.

JPMorgan Chase & Co., Lehman Brothers and UBS Investment Bank are the lead managers.

The bonds will price in a serial structure from 2009 to 2028 with term bonds due 2033 and 2038.

The MTA will use the proceeds for transit and commuter projects, as well as for refinancing debt held by the MTA and MTA Bridges and Tunnels.

Plainfield schools price $70 million bonds

In other pricing news, the Plainfield Community Consolidated School District in Illinois was expected to price $70 million in bonds, John Markley, interim assistant superintendent of business and operations for the district confirmed earlier with Prospect News.

The terms of the deal were not immediately available.

The A-rated bonds were expected to price in a serials due from 2009 to 2028 with coupons expected to come at 3% to 3.5%, Markley said in an earlier interview.

Proceeds will be used for an addition to the high school, roof replacements at the elementary school's building, a new elementary school building, road improvements for Plainfield High School South and the possible construction of a transportation facility, Markley said. Those buildings will be built within the next year, he added.

Elsewhere, the Port Arthur Independent School District in Texas successfully priced $65 million in unlimited tax school building bonds (A3/A/A-), according to a source familiar with the deal.

The terms of the bonds were not available Monday afternoon, the source said.

RBC Dain Rauscher was the lead manager for the negotiated offering.

Proceeds will be used for the construction and equipment of school buildings, as well as for the renovation of existing facilities.

St. Cloud brings $200 million

Looking ahead to later this week, St. Cloud in Minnesota plans to price $200 million in health care variable-rate demand revenue bonds in a negotiated sale on Tuesday.

The bonds (Aaa/AAA) will be sold through lead managers JPMorgan Chase & Co. - for the series 2008A and 2008B bonds - and RBC Capital Markets, for the 2008C bonds.

The offering includes $70 million in series 2008A bonds, $70 million in series 2008B bonds and $60 million in 2008C bonds, according to an official statement and a source connected to the deal.

The bonds are due May 1, 2042 and the interest rate resets weekly.

Assured Guaranty Corp. is the bond insurer.

Proceeds from the offering will be used to fund St. Cloud Hospital and CentraCare for the construction of an addition to the hospital, the construction of an expansion to the electrophysiology area and the construction of a parking deck, according to an official statement.

Hackensack University Medical Center plans offering

Further ahead, in March the New Jersey Health Care Facilities Finance Authority plans to price $85 million in series 2008 revenue bonds on behalf of Hackensack University Medical Center on March 1, a source connected to the deal confirmed Monday.

The bonds are expected to price March 1, the source said Monday afternoon, but added that the pricing date is subject to change.

On Monday, Moody's Investors Service rated the bonds A3 with a negative outlook and Fitch rated the bonds A- earlier this month.

Assured Guaranty is expected to be the bond insurer.

Proceeds from the deal will be used to construct a new cancer center and a 975-space parking garage.

Moody's gave the bonds a negative outlook, basing its decision on the impact of additional debt on "an already leveraged balance sheet that is light on cash for an organization of this size and has outstanding lease obligations and significant unfunded pension liability that further reduce total debt coverage despite its improving operational profile."

Lebanese American University bonds

In recent pricings, Lebanese American University in New York priced $75 million taxable bonds at par on Friday, according to the final official statement.

The series 2008 bonds (A3/A-) priced with a 6.75% coupon Aug. 1, 2008, until Feb. 1, 2013. After that, the coupon increases to 7.35% until the final maturity Feb. 1, 2018.

Morgan Stanley was the underwriter for the negotiated sale.

Proceeds will be used for general corporate purposes, including financing the acquisition and construction costs for facilities.

California Statewide Communities' bonds

Elsewhere, California Statewide Communities Development Authority priced $59.595 million in insured health facility revenue bonds for the Los Angeles Jewish Home for the Aging on Thursday, according to an official statement released Monday.

The bonds (A+) priced in a serial structure from 2011 to 2019 with coupons from 3.75% to 5%. The 2011 coupon came in at 4% and the 2019 coupon was 4.5%.

The bonds also included term bonds due 2013, 2028 and 2037. The 2013 coupon came at 4.5%, priced at 103.128 and the 2028 coupon was 5%, priced at 100.63. The 2037 coupon was 5%, priced at 99.074.

Cain Brothers was the lead manager for the negotiated sale.

The proceeds will be used for a loan to Fountainview at Eisenberg Village LLC; Los Angeles Jewish Home for the Aging; Eisenberg Village at the Los Angeles Jewish Home for the Aging; Grancell Village at the Los Angeles Home for the Aging; and JHA Geriatric Services, Inc. Those entities will use the proceeds for the construction and equipment of a new Continuing Care Retirement Community. The community will include a 108-unit apartment facility.

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