American Municipal Power prices $168.215 million BANs to yield 2.15%; large slate of pricings to come

By Cristal Cody and Sheri Kasprzak

New York, Jan. 22 - American Municipal Power, Inc. out of Ohio led a light pricing day Tuesday as the municipal market got back down to the business following the Martin Luther King, Jr. holiday.

The utility priced $168 million in 2008A commercial paper bond anticipation notes through dealer J.P. Morgan Securities.

A source close to the offering said the bonds priced at par to yield 2.15%.

The source said in an interview that the notes, due March 4, 2008, are only good for 270 days and may be rolled, up to $350 million in size.

Another source connected to the bonds said: "We're very pleased. It was a great deal with the timing and the Fed cutting the rate. It was a great sale. We sold for 42 days with the rate at 2.15%."

In upcoming offerings, Las Vegas Valley Water District plans on pricing $365.38 million in general obligation bonds (Aa1) in a competitive offering, according to a preliminary official statement released Tuesday.

In a sale scheduled for Jan. 29, the district intends to price $192.595 million in series 2008A improvement and refunding bonds and $172.785 million in series 2008B refunding bonds.

The 2008A bonds will have a serial structure from 2009 through 2038 and the 2008B bonds also have a serial structure from 2009 through 2026.

Proceeds from the bonds will be used to refund an issue of 1998 bonds.

NSB Public Finance, Public Financial Management and Hobbs, Ong and Associates are the financial advisors.

Albany airport to offer $83 million

In other upcoming deals, Albany County Airport Authority will price $83.435 million airport revenue bonds on Monday, although the market is a bit shaky due to recession fears.

"It's a tough time now that the Fed dropped the rate this morning, which was a surprise," said J. Dwight Hadley, chief financial officer of the airport authority. "There's a rumor it may drop again next week. I haven't been able to digest all that."

The variable rate refunding series 2008A bonds, being sold through a competitive sale, will have a floating rate that resets weekly, he said.

"So people can throw the bonds back if they don't like the rate," Hadley said.

The bonds have serial maturities Dec. 15, 2008, through Dec. 15, 2023. The financial advisor is Depfa First Albany Securities LLC in New Albany, N.Y.

Proceeds will be used to help refund the authority's outstanding series 1997 bonds in February and fund a debt service reserve.

The plunge in European and Asian stock markets on fears the United States is headed into a recession could have an effect on bond issuances, Hadley said.

"To the extent of debt, it affects the Treasury rates, and bond rates tend to follow that same yield curve," he said.

Bon Secours splits by county

Bon Secours Health System of Virginia priced $243.28 million bonds in five tranches to divide the debt across several counties, the healthcare network's chief financial officer said in an interview.

The deal was brought as five tranches for a couple of reasons, Katherine Arbuckle said Tuesday.

"First, issues needed to be divided among the various counties where the assets are located and being financed," she said. "Secondly, once split among the three geographic locations, some of the issues were still large, and we split them into two smaller sizes should we ever need to convert to some other mode."

Bons Secours is a nonprofit Catholic health care system, with operations that include 20 acute-care hospitals.

The bonds were made up of series 2008A bonds of $69.925 million, series 2008B-1 bonds of $40.345 million and series 2008B-2 bonds of $40.35 million. The issue also included $46.44 million in series 2008C-1 bonds and $46.22 million in series 2008C-2 bonds.

The daily variable-rate bonds, which bear maturities 2031 through 2042, priced Jan. 15 with Citigroup Global Markets as the underwriter.

Proceeds will be used to reimburse the system for $152 million in capital expenses in South Carolina and Virginia and refund $81 million in series 2003 bonds used to construct St. Francis Hospital in Chesterfield, Va.

Harvard's $387.21 million could price Wednesday

Harvard University's plans to issue $387.21 million series 2008A corporate bonds on Wednesday are not definite, according to a source with underwriter Morgan Stanley.

The pricing date had been announced last week, according to Moody's Investors Service.

Additional information is expected to be available on Wednesday, the source reported.

The bonds will be issued as fixed-rate bullet securities, with $144.55 million maturing in 2013 and $242.655 million maturing in 2038.

Morgan Stanley is the book runner, with Lehman Brothers and Loop Capital Markets LLC as co-managers.

Moody's assigned an Aaa rating Friday to the university's taxable bonds.

The university plans to use the proceeds to refinance capital projects previously funded with commercial paper.

Florida utility's $150 million bonds price Feb. 6

JEA Water & Sewer Enterprise is getting ready to price $150 million in variable-rate water and sewer revenue bonds on Feb. 6.

The 2008 series A-1 and A-2 bonds, of $75 million each, will have rates that change weekly, said Helen Kehrt, director of JEA's treasury services.

The bonds are convertible, in whole by series, to a daily rate mode, fixed-rate mode, term rate mode, flexible-rate mode or auction-rate mode.

Series A-1 will bear maturities 2009 to 2036, while series A-2 will mature 2010 to 2042, Kehrt said.

The underwriter is Morgan Stanley.

The Florida-based electric and water utility for Jacksonville, Fla., and surrounding counties plans to use the proceeds to finance extensions and improvements to the water and sewer system.

Texas Transportation $1.1 billion to lead Wednesday

More immediately, Wednesday is gearing up to be a very active day for pricings, led by an enormous offering of general obligation mobility fund bonds from the Texas Transportation Commission (Aa1).

The commission plans to price $1.1 billion in bonds with serial maturities from 2009 through 2033 and a $351.795 million term bond due 2037.

The proceeds will be used for transportation projects, including the expansion and construction of state highways.

UBS Investment Bank is the lead manager for the negotiated offering.

Clark County in Nevada will bring $200 million in two bond offerings Wednesday.

The county plans to price $100 million in sales and excise tax commercial paper notes series 2008A (P-1) and $100 million in sales and excise tax commercial paper notes series 2008B.

The offering is negotiated with Citigroup Global Markets, Inc. as the lead manager for the 2008A bonds and UBS Securities LLC as the lead manager for the 2008B bonds.

Both series of bonds will be used for street and highway improvements.

Another deal comes out of Wisconsin, this one for $135 million.

The state intends to price clean water bonds (Aa1) in two tranches with the proceeds to be used for loans to municipalities for wastewater treatment facility improvements and the refunding of outstanding bonds.

Also coming up Wednesday are offerings from Mecklenburg County, North Carolina; Portage Public Schools in Michigan; Rensselaer Polytechnic Institute in Troy, N.Y.; the Washington Drama Society in the District of Columbia; and the Washington Suburban Sanitary District in Maryland.

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