Dallas, Metropolitan Water District of Southern California head up heavy pricing action

By Cristal Cody and Sheri Kasprzak

New York, May 28 - Wednesday proved to be very active for pricings with the activity led by Dallas, which priced $158.655 million in waterworks and sewer system revenue refunding bonds.

Elsewhere, issuers were heading to the market with new offerings, but some are being cautious about the market conditions. In fact, one issuer - Romeoville, Ill. - put off pricing an offering that had been scheduled for Wednesday. A sellside source familiar with the deal said the sale was postponed due to market conditions.

Another issuer said it was watching market conditions carefully ahead of a pricing in early June.

Looking back at the Dallas bonds, the city priced $158.655 million in revenue refunding bonds with a 4.567% true interest cost, a source connected to the sale said.

The series 2008 bonds (Aa2/AAA/) priced with 4% to 5% coupons to yield 1.95% to 4.55% over the Oct. 1, 2008 through Oct. 1, 2030 serial maturities.

The 2033 and 2037 term bonds priced with 5% coupons to yield 4.6% to 4.67%.

"Yields were slightly up a couple basis points this morning, but it came back around," the source noted.

Citigroup Global Markets was the winning bidder out of eight bidders in the competitive sale.

The sale started with 10 bidders, but two chose not to bid because of the short business week, the source said.

Proceeds will be used to refund and retire $165 million of the city's outstanding $230.542 million commercial paper notes.

Southern California water district bonds

Also in pricing news Wednesday, the Metropolitan Water District of Southern California priced $137 million in water revenue refunding bonds, said Keith Norris, debt administrator for the district.

The bonds (Aa2/AAA/AA+) had both retail and institutional order periods.

In the institutional sale, the bonds are due in 2009, 2016 and from 2018 to 2022 with coupons from 3% to 5% and yields from 1.7% to 4.06%. In the retail sale, the bonds are due 2010 to 2022 with coupons from 4% to 5% and yields from 2.2% to 4.06%.

Citigroup Global Markets was the lead manager for the negotiated sale.

The district plans to use the proceeds to refund outstanding water revenue bonds.

Romeoville bonds postponed

The Village of Romeoville in Illinois had intended to price $108.5 million in capital appreciation bonds Wednesday, but the sale was put off until a later date, a sellsider told Prospect News.

"They're also putting off the $47 million G.O.s that were going to price today," said the sellsider connected to the deal.

The issuer, according to the sellsider, is holding out for better market conditions. No date has been set for the sale at this time.

The general obligation bonds, as previously announced, are due from 2021 to 2037.

Also on Wednesday, the New York City Municipal Water Finance Agency had been scheduled to price $500 million in series 2008DD water and sewer system second general resolution revenue bonds (Aa3/AA/AA). The bonds were set to price on a negotiated basis through lead manager Siebert Brandford Shank & Co.

The sale could not be confirmed with the issuer by press time Wednesday afternoon.

Proceeds will be used to pay commercial paper notes and to make a deposit to a construction fund.

The New Jersey Economic Development Authority intended to price $250 million in series 2008X school facilities construction bonds (A1//A+) on a negotiated basis with Merrill Lynch as the senior manager.

Proceeds will be used for school facilities construction projects.

Calls to the issuer for pricing information were not returned Wednesday.

Texas sale set for Thursday

The Texas Higher Education Coordinating Board expects to price its $102.435 million G.O. bonds via a competitive sale on Thursday, a source told Prospect News.

The sale includes $74.39 million series 2008A college student loan bonds and $28.045 million series 2008B college student loan refunding bonds.

The bonds (Aa1/AA/) had been planned for a sale falling on a day between May 28 and June 10.

The series 2008A bonds have serial maturities from 2012 through 2032. The series 2008B bonds have maturities from 2014 through 2018.

First Southwest Co. is the state board's financial adviser.

Proceeds will be used to fund a student loan program and to refund the outstanding $26.82 million in Aug. 1, 2009 maturities from the series 1997, 1999, 2000 and 2002 student loan bonds.

San Antonio bond sale planned

Looking ahead, San Antonio plans to price $289.54 million in series 2008 electric and gas system revenue bonds on June 5, said Paula Gold-Williams, the chief financial officer of CPS Energy.

The bonds (Aa1//AA+) will be sold on a negotiated basis with Lehman Brothers as the senior manager.

"We don't have anything absolutely targeted," Gold-Williams said when asked if CPS is seeking any particular coupon for the sale. Instead, the issuer is going to feel out the market conditions, she noted. "We're going to be looking at that."

The proceeds will partially fund the construction of a coal-fired power plant for CPS Energy.

Delaware Transportation bonds set

Also ahead, the Delaware Transportation Authority plans to price $91.165 million in series 2008A transportation revenue bonds on June 4, according to a preliminary official statement released Wednesday.

The bonds (Aa3/AA+/) will be sold on a competitive basis and are due from 2009 to 2028.

Some of the proceeds will fund capital projects and the rest will refund the authority's series 1998 senior revenue bonds.

Virginia authority bonds

The Virginia Resources Authority plans to price $72.92 million infrastructure revenue bonds for the Virginia Pooled Financing Program on June 5, the issuer said Wednesday.

The $50.075 million series 2008A senior bonds (Aaa) and $22.845 million series 2008A subordinate bonds (Aa2//) also will price in a retail order period on June 4, executive director Sheryl Bailey said.

The sale is part of the authority's semiannual spring and fall pooled financing.

Proceeds will fund loans to eight municipal participants for a variety of community projects and will be used to refund a portion of the authority's series 1997 and 1998 bonds.

"The pooled financing program provides not only economies of scale for savings to localities with lower municipal costs, but also there's the program's credit strengths," Bailey said. "There are no bond insurance premiums or enhancements required because of the natural triple-A and double-A credit ratings."

A "natural" description notes that the ratings are based on the structure of the authority's fund and not based on bond insurance or purchased credit enhancements, Bailey said.

The structured pooled program was created in Virginia in 2003. Since then, the authority has sold more than $677 million bonds from more than 57 borrowers.

"No bond insurance is required, so we have a number of benefits and advantages of the pooled financing program. It's not just for small issuers," she said.

St. Tammany Parish district bonds

In other upcoming bond sales, the St. Tammany Parish Wide School District No. 12 in Louisiana is set to sell $67 million in series 2008 G.O. school bonds, according to a preliminary official statement.

The bonds (Aaa/AAA/) will be sold on a competitive basis.

The bonds are due from 2010 to 2028 in a serial structure, the preliminary statement said.

The proceeds from the sale will be used to acquire or improve lands for building sites and playgrounds, including the construction of necessary sidewalks and streets adjacent to the building sites. The remainder will be used to erect and improve school buildings and other school-related facilities.

Scott & White bonds planned

The Scott & White Memorial Hospital and the Scott, Sherwood and Brindley Foundation in Texas plans to price $234.225 million refunding revenue bonds on June 11, a source said Wednesday.

The series 2008 variable-rate bonds (Aa3//) also will price in a retail order on June 10.

The bonds will price through the Tarrant County Cultural Education Facilities Finance Corp.

Kaufman Hall and Associates is the financial adviser.

Proceeds will be used to refund Scott & White's series 2006A-D auction-rate securities.

Scott & White entered into floating-to-fixed-rate swaps with Goldman Sachs Capital Markets and Citibank as counterparties for the 2006 bonds, which will be maintained on the series 2008 bonds to synthetically fix the bonds.

American Municipal bond sale

American Municipal Power Inc. in Ohio plans to price $300 million revenue bonds for the Prairie State Energy Campus project the week of June 16, according to Moody's Investors Service.

The series 2008A bonds (A1//) will be used to refund the series 2008A commercial paper bond anticipation notes that were issued as temporary acquisition financing for the power company's 23.26% share of the Prairie State project.

Calls for additional information were not immediately returned.

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