New issues flood market as munis trade flat; Connecticut prices $334 million in G.O.s

By Cristal Cody and Sheri Kasprzak

New York, June 17 - A flurry of pricings dominated the market Tuesday, even as others decided to hold off a day or so.

"Today, municipals were not following Treasuries at all," a sellside source said. "The market is just a little bit flat."

Heading up Tuesday's pricing activity was a $334 million offering of general obligation bonds from the state of Connecticut.

The bonds (Aa3/AA/AA) priced with a 4.3% true interest cost, said Sarah Sanders, assistant treasurer of debt management.

"We still haven't finalized the numbers, but it will be in the 4.3% range for 20 years, so we're very pleased," she said.

The series 2008B bonds (Aa3/AA/AA) priced with 3% to 5% coupons to yield 1.59% to 4.64%, she said.

The state also sold $55 million in retail orders on Monday.

"It was a little tougher than a couple weeks ago, but it was still a good market and good demand," Sanders said. "Two weeks ago [on the series 2008A bond sale], we had $150 million in retail."

Morgan Stanley was the senior manager of the negotiated sale.

Proceeds will be used for the state's school construction grant program.

Miami-Dade prices revenue bonds

In other pricing news Tuesday, Miami-Dade County of Florida priced $271.595 million in series 2008 transit system sales surtax revenue bonds, a sellside source said.

Merrill Lynch won the competitive bid with a 4.891841% TIC. There were six bidders in the offering, the sellsider said.

The bonds (A1//A+), which are due from 2009 to 2038, have yields from 3% to 4.47% and were priced at par.

Proceeds from the sale will be used for transit and public works projects and for refunding an outstanding loan.

Eastern Municipal Water COPs

Elsewhere in pricing news, Eastern Municipal Water District in Riverside County, Calif., priced $54.62 million water and sewer revenue refunding certificates of participation with a 1.55% initial rate on Tuesday, said Chuck Rathbone, chief financial officer.

"That was right within our range," he said. "We had two-and-a-half times the orders."

The series 2008C variable-rate COPs priced with a weekly interest rate. The COPs (Aa3/AA/AA) are due July 1, 2020.

Citigroup Global Markets managed the negotiated sale.

Proceeds will be used to refund the series 1993B COPs without insurance from FGIC.

The district also plans to refund $120 million series 2003A, 2003B and 1998A COPs to terminate insurance by MBIA Insurance Corp. and to price about $360 million in new money.

Essex County, N.J., BANs and G.O. bonds

Also, Essex County, N.J., priced $75 million bond anticipation notes and $18 million G.O. bonds with 1.755% and 4.032% interest costs on Tuesday, a source familiar with the sale told Prospect News.

Bank of America was the winning bidder with the 1.755% net interest cost in the competitive sale of the $75 million series 2008 notes.

The notes (MIG 1//), due June 25, 2009, priced with a 3% coupon.

The $9 million series 2008A and $9 million series 2008B county college bonds (A1//) priced with a 4.032% TIC by winning bidder Citigroup Global Markets.

The bonds priced with 3.5% to 5% coupons from 2009 through 2023.

The yields were not available.

Proceeds will be used to finance projects, including improvements to Essex County College and Essex County Vocational School.

Pima County, Ariz., 3.52% TIC

Pima County, Ariz., priced $50 million COPs with a 3.52% TIC, a sellside source said Tuesday.

"The tone of the market yesterday was a little bit off," the sellsider said. "There was decent demand for these bonds but it was from a limited buyer base."

The series 2008 COPs (A1/A+/) priced with 5% coupons to yield 2.23% in 2009, 3.12% in 2010 and 3.5% in 2011.

RBC Capital Markets managed the negotiated sale.

Proceeds will be used to finance the acquisition of leased property and expansion and upgrades to the county's sewer treatment system and roads.

Puerto Rico Electric Power Authority sale

The Puerto Rico Electric Power Authority priced $700 million revenue bonds with a 5.31% TIC on Tuesday, a source connected to the sale told Prospect News.

The $700 million series WW bonds (A3/BBB+/A-) priced with a fixed interest rate.

The final terms were not available.

The authority did not price the planned additional $100 million series XX revenue refunding bonds, the source said.

JPMorgan was the senior manager of the negotiated sale. Senior co-managers were Wachovia Bank, NA and Morgan Stanley.

Proceeds will be used for deposits to a $2.1 billion capital-improvement program to make the electric system more fuel-efficient and an escrow fund for refunded bonds.

Projects underway include the Mayaguez combustion turbines, the conversion of the Aguirre combined cycle units to natural gas and transmission and distribution projects.

University of Maryland sale

The University System of Maryland's sale of $142 million series 2008 public university revenue bonds (Aa2//AA) also went through on Tuesday, a source said.

The $90 million series 2008A and $52 million series 2008B bonds were sold to refund outstanding bonds and for campus improvements.

Additional information was not available by press time.

Kentucky Higher Education sale

Also on Tuesday, the Kentucky Higher Education Student Loan Corp. was expected to price $300 million in series 2008A-1 tax-exempt and series 2008A-2 taxable variable-rate demand revenue and refunding bonds. Calls to the issuer for details were not immediately returned.

The bonds were sold on a negotiated basis with Bank of America as the senior manager.

Proceeds will refinance $217 million in auction-rate bonds and issue $83 million in new, tax-exempt bonds used to pay down a line of credit.

In other news out of Kentucky, the Kentucky Housing Corp. had been expected to price $50 million in series 2008C and 2008D revenue bonds on Tuesday. The issuer did not return calls for the terms.

The sale included $14.23 million in series 2008C bonds and $35.77 million in series 2008D bonds.

Merrill Lynch was the lead manager of the negotiated sale.

Thomas Health offering

Looking ahead to upcoming sales, Thomas Health System plans to price its previously announced $145 million revenue bonds on Wednesday, a sellside source told Prospect News.

The series 2008 bonds will price through the West Virginia Hospital Finance Authority.

The bonds are due Oct. 1, 2043.

Raymond James will manage the negotiated sale.

Proceeds will be used to refinance a $45 million loan used to acquire St. Francis Hospital, to construct a six-story hospital pavilion and to purchase equipment.

Texas Water sale

Also ahead, the Texas Water Development Board expects to price $258 million state revolving fund subordinate lien revenue bonds on June 24, a source with the issuer said Tuesday.

The series 2008B bonds (Aaa//) will be sold to reimburse the board for funds used to originate loans to borrowers under the state's Clean Water State Revolving Fund Program. The program allows borrowers to receive a below-market interest rate.

The National Academy of Sciences intends to price $65 million variable-rate demand revenue bonds through the District of Columbia on Wednesday, Washington, D.C., treasurer Lasana Mack told Prospect News.

The series 2008A bonds (Aaa/VMIG 1//) will price initially with a weekly interest rate.

Banc of America Securities LLC will manage the negotiated sale.

In other upcoming offerings, Gilbert, Ariz., intends to price $187.99 million G.O. bonds in a competitive sale on June 24, according to a preliminary official statement released Tuesday.

The series 2008 bonds have serial maturities from 2009 through 2023.

The bonds were authorized in town elections in 2006 and 2007.

Peacock, Hislop, Staley & Given Inc. is the town's financial adviser.

Proceeds will be used for improvements to streets, parks and recreational facilities.

Jewish Hospital's $330 million deal

Jewish Hospital and St. Mary's Healthcare Inc. in Kentucky plans to price $330 million revenue bonds through the Louisville/Jefferson County Metro Government, according to a preliminary official statement.

The series 2008 bonds (A3/A+/) have serial maturities from 2014 through 2020 and term bonds in 2023, 2028 and 2037.

Morgan Stanley will manage the negotiated sale.

Proceeds will be used to finance a new power plant facility at Sts. Mary & Elizabeth Hospital, renovations to other hospitals and to refund the series 2002 and series 2004 revenue bonds.

Also looking ahead, the Metropolitan Transit Authority of Harris County in Texas plans to price $62.86 million in series 2008A lease revenue COPs this week, said a calendar of upcoming bond sales.

The exact pricing date could not be determined.

The bonds (A2/AA-/) will be sold on a negotiated basis with Rice Financial Products as the lead manager.

The bonds have a serial structure from 2009 to 2020.

Proceeds will be used for equipment costs, including diesel-electric hybrid buses.

Texas Public Finance sale

Also ahead, the Texas Public Finance Authority intends to sell $225 million in series 2008A G.O. bonds, said a statement from Moody's Investors Service released Tuesday.

According to Moody's, the bonds will price on July 7, but other reports have indicated the sale will occur the week of July 7.

The bonds (Aa1//AA+) will be sold on a negotiated basis.

Proceeds from the deal will be used to refund a portion of the G.O. bonds issued to refinance projects for the state department of criminal justice, department of mental health and mental retardation and the youth commission. The new money bonds will be used to fund repairs and renovation to the criminal justice department and land acquisition and construction, as well as for renovation projects at the state department of public safety.

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