Issuers feel out the market day by day; New Mexico puts kibosh on $500 million TRANs sale for now

By Cristal Cody and Sheri Kasprzak

New York, Sept. 22 - The market is bursting with potential new offerings, a sellsider said Monday, but most issuers are playing a waiting game with the market.

There are loads of deals waiting to price, but shaky market conditions are causing most issuers to think twice about putting their offerings on the table.

"Most of the issues this week are going on a day-by-day basis, from what I've seen," said one sellside source reached Monday.

"A lot of issuers are still really skittish and they really want to see how things are going to pan out before pricing."

A jump in interest rates last week prompted jittery borrowers from Ohio to Florida to postpone the sale of more than $7 billion in fixed- and variable-rate offerings, according to one sellsider's market report on Monday.

"Tax-free municipal bonds also felt the effects of the troubled credit markets," the sellsider noted.

New Mexico delays deal

One of the largest sales of the week has been put off until the market steadies itself.

The State of New Mexico no longer plans to price its $500 million offering of series 2008-2009 tax and revenue anticipation notes, delaying the offering a full day ahead of the sale date.

The bonds had been scheduled for pricing Tuesday, but the offering, a sellside source close to the deal said, will now be priced later.

"We're just monitoring the market right now and hoping things improve," said the sellsider.

"Market conditions are just too shaky and we're just feeling things out now."

The notes (MIG 1/SP-1+/) will be sold on a competitive basis with Fiscal Strategies Group as financial adviser.

The notes are due June 30, 2009.

Proceeds will be used to pay for capital expenses incurred before taxes and other revenues for the 2008-2009 fiscal year can be collected.

Ashland Hospital revenue bonds

Elsewhere, Ashland Hospital Corp., also known as the King's Daughters Medical Center, in Kentucky had planned to price $100 million in revenue bonds Monday, Paul McDowell, chief financial officer for the hospital, said early in the day. But the pricing terms were unavailable Monday afternoon.

McDowell said the bonds were on target to price Monday.

"We'll have to see what happens in the market today, but that's what the schedule is," said McDowell.

The series 2008A and 2008B bonds were expected to price through the Kentucky Economic Development Finance Authority.

The bonds (A1/A+/A+) were expected to be offered through a negotiated sale managed by RBC Capital Markets.

Ohio to sell $296.74 million

Looking ahead to upcoming sales, the State of Ohio is expected to price $296.74 million in series 2008 general obligation and general obligation refunding bonds as early as this week, a preliminary official statement said Monday.

The exact pricing date has not been set at this time.

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

The sale includes $240 million in series 2008A infrastructure improvement G.O. bonds, which are due 2009 to 2028, and $56.74 million in series 2008B infrastructure improvement G.O. refunding bonds, which are due 2009 to 2014.

Proceeds will be used for financing local subdivision capital improvement projects approved by the state's General Assembly.

ThedaCare bonds ahead

Also coming up, the Wisconsin Health and Educational Facilities Authority plans to price $127.57 million revenue bonds for ThedaCare Inc., according to a preliminary official statement.

The series 2008 bonds (A1//AA-) have serial maturities from 2009 through 2020 and terms due 2033 and 2037.

Merrill Lynch & Co. will manage the negotiated sale.

Proceeds will be used to construct, renovate and equip health-care facilities and to refund the outstanding $32 million from the series 1997B bonds and $6.5 million from the series 1999B bonds, which priced through the Community Development Authority of the City of Waupaca, Wis.

Georgetown University refunding bonds

Also coming up, Georgetown University in the District of Columbia plans to price $63.85 million variable-rate refunding bonds as part of an overall auction- and variable-rate debt restructuring, according to a preliminary official statement.

The series 2008A bonds, due 2029, will price initially with a weekly interest rate.

Goldman, Sachs & Co. will manage the negotiated sale.

Proceeds will be used to refund $63.85 million of the $100 million outstanding from the series 1999A auction-rate bonds.

The university plans to restructure its existing auction-rate debt by remarketing and or refunding $336 million as term rates or fixed-rate debt and by remarketing the remaining $115 million in auction-rate debt as weekly variable-rate bonds.

Northern Muni Power Agency sale

Also this week, the Northern Municipal Power Agency of Minnesota plans to price $82.62 million in series 2008 electric system revenue bonds, said a calendar of upcoming deals.

The bonds (A2/A-/) will be sold through senior manager Goldman, Sachs & Co. The exact pricing date has not been set at this time, according to an issuer source, because the agency is still feeling out market conditions in light of last week's turmoil.

The sale includes $79.18 million in series 2008C bonds and $3.44 million in series 2008D bonds.

Proceeds will be used to refund all of the agency's outstanding series 1998 bonds.

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