Redemptions, conversions continue; Citizens Property to redeem $1.15 billion in high-risk bonds

By Cristal Cody and Sheri Kasprzak

New York, March 24 - Weeks after the auction-rate crisis sent issuers rushing to convert or redeem their bonds, many are still announcing plans to redeem or convert auction-rate bonds.

Citizens Property Insurance Corp. out of Tallahassee, Fla. said Monday it will redeem $1.15 billion of its high-risk account senior secured bonds that are structured as auction-rate securities.

The redemptions will occur in April or May, according to a notice.

The $100 million series 2001A-1 bonds due 2017 will be redeemed April 29; the $100 million series 2006A-4 bonds due 2020 will be redeemed April 30; and the $100 million in series 2006A-7 bonds due 2023 will be redeemed April 25.

Also to be redeemed are $175 million each in series 2006A-12 bonds due 2018 on May 8; series 2006A-16 bonds due 2022 on May 19; series 2006A-18 bonds due 2024 on May 1; and series 2006A-19 bonds due 2025 on May 5.

The corporation's $150 million in series 2004A and 2004B bonds will also be redeemed with the series 2004A bonds due 2016 set for redemption on May 7 and the series 2004B bonds set for redemption May 9.

The California Department of Water Resources also said Monday it will redeem some of its auction-rate securities.

The redemption notice affects its series 2002 and 2005 power supply revenue bonds, a notice said.

The bonds to be redeemed include $200 million in series 2002C-2 bonds due 2022, $50 million in series 2002C-3 bonds due 2022 and $300 million in series 2005G-10 bonds due 2018, all of which will be redeemed on April 1.

Also to be redeemed are $100 million in series 2002D-3 bonds due 2022, which will be redeemed April 16. The department's $100 million in series 2002D-4 due 2022, which will be redeemed April 23, and $100 million in series 2002D-5 due 2022, which will be redeemed April 30, are also impacted.

All of the bonds will be redeemed at par, according to the notice.

Nashville and Davidson to convert bonds

In other redemption news, the Health and Educational Facilities Board of the Metropolitan Government of Nashville and Davidson County, Tenn., plans to convert $61.235 million revenue bonds on April 1.

The series 2005B-1 revenue bonds (Aaa/AAA/AAA), priced for Vanderbilt University, will be converted from a term rate to a flexible rate, according to a remarketing statement released Thursday.

Merrill Lynch & Co. is the remarketing agent.

The bonds continue to be guaranteed under an insurance policy by MBIA Insurance Corp.

Pew Trusts to price bonds

In upcoming offerings, the Pew Charitable Trusts in the District of Columbia plans to price $200 million in variable-rate revenue bonds later this week.

The nonprofit will price $180 million in series 2008A bonds and $20 million in series 2008B bonds (Aa3) on Wednesday.

The bonds will initially bear interest at the weekly rate, but may be converted to a term or fixed-rate mode.

PNC Capital Markets is the lead manager for the negotiated sale.

In other pricing news, the Doylestown Hospital Authority in Pennsylvania will price $138.975 million in series 2008 bonds Tuesday, a sell-side source told Prospect News.

The offering includes $63.975 million in series 2008A fixed-rate revenue bonds and $75 million in series 2008B variable-rate demand obligations.

PNC Capital Markets is also the lead manager for this negotiated sale.

The bonds were rated Baa1 by Moody's Investors Service on Monday.

The proceeds will be used to refund the authority's 1993 bonds, 1998B bonds and 1998C bonds; refinance capital leases for equipment owned and used by Doylestown Hospital; and to finance the cost of capital improvements and the acquisition of equipment for Doylestown Hospital, as well as to refinance an $11 million bank loan from PNC Bank.

Other sales this week

Also this week, the City of Industry, Calif., expects to price $81.455 million sales tax revenue bonds on Tuesday, the issuer told Prospect News.

The series 2008 sales tax revenue bonds (A1) will be sold in a competitive sale, said Phyllis Tucker, city treasurer.

Proceeds will be loaned to the Industry Urban Development Agency for redevelopment projects in the city.

Chester County Industrial Development Authority plans to price $99.605 million student housing revenue bonds on Wednesday, according to a release from Moody's Investors Service.

Moody's rated the series 2008A bonds Aa2/VMIG 1 on Monday.

The bonds will be sold for the University Student Housing LLC project at West Chester University of Pennsylvania and will price with an initial weekly interest rate.

Morgan Keegan & Co. is the underwriter.

No additional information was available by press time Monday.

The Metropolitan Water District of Southern California was expected to price $500 million water revenue refunding bonds Monday, according to Moody's Investors Service.

The series 2008A-1 and 2008A-2 bonds (Aa2/VMIG 1) will bear interest in the weekly rate mode beginning April 1, 2008.

Proceeds will be used to refund the district's outstanding auction rate bonds.

Calls for additional information were not returned.

New Mexico bonds price Tuesday

Elsewhere in pricing news, the New Mexico Finance Authority was expected to price $160.645 million in senior lien public project revolving fund revenue bonds (Aa2/AA+/AA) on Monday, but the bonds were postponed to Tuesday, said a source at the authority's finance department.

The bonds will sell on a negotiated basis through lead manager UBS Securities.

The serials are due from 2008 to 2038.

The proceeds will be used to originate loans or reimburse the authority for loans made to local governments in New Mexico.

OakBend Medical leads upcoming deals

Looking ahead, OakBend Medical Center in Richmond, Texas, plans to price $75 million variable rate hospital bonds on April 1, a source told Prospect News.

The series 2008 bonds (A1/VMIG 1) initially will bear interest in a daily rate mode.

Morgan Keegan & Co. is the underwriter.

Proceeds will be used for new construction and to refund old debt.

Nevada plans to price $131.975 million highway improvement revenue bonds in a competitive sale on April 3.

The series 2008 motor vehicle fuel tax bonds have serial maturities from 2011 through 2025, according to a preliminary official statement released Thursday.

Public Resources Advisory Group is the state's financial advisor.

Proceeds will be used to fund state highway construction projects.

Advocate Health Care Network in Illinois also plans to price $152.475 million variable rate bonds on April 1, Moody's reported.

The series 2008A bonds received an Aa3/VMIG 1 rating from Moody's.

The bonds will be sold through the Illinois Finance Authority.

The series 2008A bonds are expected to be annual put bonds with unremarketed tenders supported by the company's liquidity.

Advocate Health Care also expects to price $471 million series 2008B and 2008C variable rate demand bonds in the next few weeks.

Citigroup Global Markets is the underwriter.

The proceeds will be used to refund Advocate's auction rate bonds, including the series 2005A and 2005B bonds and the series 2007A and 2007B bonds.

The University of Miami plans to price $340 million revenue bonds on April 2, a source said Monday.

The series 2008A and 2008B bonds (A2) will be sold through the Miami-Dade County Educational Facilities Authority.

The series 2008B bonds are taxable.

Morgan Stanley is the underwriter for the negotiated sale.

Proceeds will refund a bank credit facility that was used to finance the acquisition of Cedars Medical Center and various capital improvements to the facility.

Roanoke County bonds price

The Economic Development Authority of Roanoke County, Va., released details from the sale of $58.595 million lease revenue bonds, which priced with a 4.8151% true interest cost.

The series 2008 insured bonds (Aaa/AAA/AAA) were sold with serial maturities from Oct. 15, 2008 through Oct. 15, 2024 and term bonds due 2027, 2032 and 2037.

The bonds priced with 3% to 5% coupons to yield 2.25% to 4.69% for the serial maturities.

The 2027 term bond priced with a 5% coupon to yield 4.92%; the 2032 term bond priced with a 5% coupon to yield 5.09%; and the 2037 term bond priced with a 5.125% coupon to yield 5.17%.

The bonds are insured by Assured Guaranty.

Davenport & Co. managed the negotiated sale.

Proceeds will be pooled with $11.2 million of county funds to construct a recreation facility, library, public works garage and fire station and to purchase police radio equipment.

The Industrial Development Authority of Pima County, Ariz., also released details on Monday from the sale of $90.745 million industrial development revenue bonds that bear a 6.375% interest rate, according to a filing from the U.S. Securities and Exchange Commission.

The bonds, due Sept. 1, 2029, were sold March 19 for the Tucson Electric Power Co.

Proceeds were used to redeem bonds repurchased by the power company in 2005.

The company also plans to redeem $10 million of the collateral trust bonds due Aug. 1, 2008, on May 16.

Additional pricing information was not immediately available.

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