New slate of offerings crowd muni market; Lehigh Valley Hospital prices $95.59 million revenue bonds

By Cristal Cody and Sheri Kasprzak

New York, June 9 - A new round of offerings were revealed Monday, crowding an already-packed calendar of deals.

In addition to the new deals, a few bonds were also priced on Monday.

Leading the action was the Lehigh Valley Hospital and Health Network in Pennsylvania which priced $95.59 million revenue bonds with a 1.1% initial daily interest rate, a source said Monday.

The series 2008B bonds (Aaa/AAA/) were sold through the Lehigh County General Purpose Authority.

The bonds, insured by Assured Guaranty Corp., are due July 1, 2028.

Wachovia Securities managed the negotiated sale.

Proceeds will be used to finance the costs of refunding the outstanding series 1998A, 1998B and 1998C revenue bonds.

In other pricing news, San Antonio revealed on Monday that the city's $287.935 million revenue bonds for CPS Energy priced with a 4.582% true interest cost.

The series 2008 electric and gas system revenue bonds (Aa1//AA+) priced with 4% to 5% coupons to yield 3.76% to 4.78%, said David Jungman, senior director of finance at CPS Energy.

The bonds have serial maturities from 2017 through 2032.

Lehman Brothers was the senior manager of the negotiated sale.

Proceeds will be used to partially fund construction of a coal-fired power plant.

The California Statewide Communities Development Authority had been expected to price $273.535 million tax and revenue anticipation notes on Monday.

The series 2008A1 notes (MIG 1//) were sold for a pool that includes 12 cities, nine counties and four special districts.

Financial Security Assurance has a limited insurance policy on 15% of the notes.

JPMorgan managed the negotiated sale.

Miami airport bonds

In other pricing news, the Miami International Airport priced $600 million in series 2008 aviation revenue bonds late last week, according to an official statement released Monday.

The bonds (A2/A-/A) were sold on a negotiated basis with Banc of America Securities as the senior manager.

The bonds were sold through Miami-Dade County on Thursday.

The sale includes $433.565 million in series 2008A AMT bonds due from 2024 to 2027 and 2038 with term bonds due 2033, 2038, 2041 and 2041. The serial bonds have coupons from 5.35% to 5.5%. The 2033 bonds have a 5.25% coupon to yield 5.39%. The 2038 bonds have a 5.25% coupon to yield 5.41%. The 2041 bonds have a 5.25% coupon to yield 5.43%. The 2041 bonds have a 5.5% coupon to yield 5.54%.

The sale also includes $166.435 million in series 2008B non-AMT bonds due 2016 to 2041. The coupons range from 4% to 5% with yields from 3.92% to 5.05%.

The proceeds from the deal will be used for the airport's capital improvement program and the refunding of outstanding commercial paper.

Miami-Dade's upcoming bonds

Also out of Miami-Dade County, the county is slated to price $299.66 million in series 2008 transit system sales surtax revenue bonds on June 17, an issuer source confirmed with Prospect News Monday.

The bonds (A1//A+) will be sold on a competitive basis, the source said, and the pricing date is subject to change, depending upon market conditions.

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

Jewish Hospital bonds

Jewish Hospital & St. Mary's HealthCare Inc. in Kentucky planned to price $333 million revenue and refunding revenue bonds on Monday.

The series 2008 fixed-rate bonds (A3) priced through the Louisville & Jefferson County Metropolitan Government.

UBS Securities LLC was the senior manager of the negotiated sale.

Proceeds will be used to refund the series 2002 and series 2004 bonds, to provide $30 million in project funds and to provide $22.4 million to terminate the swap agreement hedging the series 2002 bonds.

Citizens to sell $1.5 billion

Moving to upcoming offerings, Florida-based Citizens Property Insurance Corp. plans to price $1.5 billion short-term senior secured bonds, according to a preliminary official statement released Monday.

The series 2008A2 high-risk account notes (MIG 1/SP-1+/) are due June 1, 2009.

Merrill Lynch & Co. is the senior manager of the negotiated sale.

Proceeds will be invested in tax-exempt bonds to provide pre-event liquidity for the company's high-risk account, which is used to pay policy claims and liabilities from storms.

Citizens did not sell its previously announced $1.5 billion series 2008A1 bonds, the company reported in the statement.

Sharon Binnun, chief financial officer, told Prospect News last month that the company delayed the sale of the senior secured bonds because of poor market conditions.

Citizens planned to watch the market in June for the best time to price the bonds, she said.

The series 2008A1 bonds (A2/A+/) will have maturities from March 1, 2011 through March 1, 2013.

Goldman, Sachs & Co. is the senior manager of the negotiated sale.

Proceeds will be used to provide resources to the high-risk account.

Boston Medical to sell bonds

Boston Medical Center expects to price $250 million revenue bonds through the Massachusetts Health and Educational Facilities Authority this week, a source with the hospital told Prospect News.

The series 2008B bonds (A3/A-/) are planned for sale either Wednesday or Thursday.

Boston Medical Center will hold an investor's conference call on Tuesday.

Morgan Stanley is the senior manager of the negotiated sale.

Proceeds will be used for deposits into the debt service fund, debt service reserve fund, expense fund and project fund.

Wisconsin children's hospital bonds

Children's Hospital of Wisconsin intends to price $101.21 million fixed-rate revenue refunding bonds, according to a preliminary official statement.

The series 2008A bonds will price through the Wisconsin Health and Educational Facilities Authority.

The bonds (Aa3/AA-/) have serial maturities from 2017 through 2021 and term bonds in 2028 and 2037.

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

Proceeds will be used to refund the series 2007 variable-rate revenue bonds.

Calls for additional information were not returned by press time.

Metro Washington Airport bonds

The Metropolitan Washington Airports Authority expects to price $250 million revenue bonds on Thursday, a source connected to the sale said Monday.

The series 2008A bonds also will be sold in a retail order period on Wednesday.

The bonds have serial maturities from 2012 through 2029.

Morgan Stanley is the senior manager of the negotiated sale.

Proceeds will be used to refinance the outstanding series one and series two commercial paper notes.

Indianapolis's $286 million sale

Indianapolis intends to price $286 million notes on June 19, according to a sale calendar.

The $86 million series 2008A1 and B1 notes are due in September 2008.

The $200 million series 2008A1, B2, C and D notes are due in January 2009.

The notes will be sold in negotiated sales managed by City Securities Corp.

Anderson County district to price

School District No. 5 of Anderson County, S.C., intends to price $77 million general obligation bonds in a competitive sale on June 18, according to a preliminary official statement released Monday.

The bonds have serial maturities from 2013 through 2038.

Proceeds will be used to acquire land, to construct and equip three new elementary and middle schools, to construct and equip an auditorium at Calhoun Academy of the Arts and to make improvements and additions to existing schools.

Massachusetts Housing bonds

Also coming up this week, the Massachusetts Housing Finance Authority rescheduled the pricing date of its planned sale of series 134 and series 135 single-family housing revenue bonds, said a calendar of upcoming sales.

The authority will sell $75 million in the bonds Tuesday. The authority had planned to sell $50 million in the bonds on Monday.

The bonds (Aa2/AA/) will be sold on a negotiated basis with Lehman Brothers as the senior manager.

The series 134 bonds are due 2009 to 2018 with term bonds due 2023, 2028 and 2038. The series 135 bonds are due 2010 to 2017.

Proceeds will be used for the purchase of single-family housing loans.

Delaware Housing offering

In other housing offerings, the Delaware Housing Authority plans to sell $60.63 million in series 2008A senior single-family mortgage revenue bonds on Tuesday, said a preliminary official statement.

The bonds will be sold on a negotiated basis with George K. Baum as the senior manager and are due 2010 to 2018 with term bonds due 2023, 2028, 2039 and 2039.

Proceeds will be used to purchase mortgage securities in order to finance single-family residential housing and to refund outstanding bonds.

Greenville Hospital bonds to price

Looking to later in the week, the Greenville Hospital System Board of Trustees in South Carolina has set Thursday as the pricing date for its $109.75 million in series 2008A revenue bonds.

The bonds (Aa3/AA-/) will be sold on a negotiated basis with Citigroup Global Markets as the senior manager.

The proceeds will be used to refund the board's outstanding series 2006A and 2006B bonds.

Auction market news

Moving to auction news, the Illinois Finance Authority plans to convert and purchase the outstanding $100.425 million series 2007C auction-rate revenue bonds for the Hospital Sisters Services Inc.

The bonds will be converted to a weekly rate on June 17, according to a notice.

MFS Investment Management is checking into the use of tender option bonds to replace the outstanding auction preferred shares of the five MFS closed-end funds that have failed in recent auctions, according to a company statement.

Boston-based MFS Investment said the straightforward refinancing of auction preferred shares with bank debt financing is not desirable for tax-exempt funds. Tender option bonds are created by a fund depositing highly rated bonds in a trust.

MFS and other market participants are investigating whether auction preferred shares could be restructured to make them eligible for purchase by money market funds by including a liquidity feature, MFS said in the statement.

If the shares can be restructured, the money market funds could create a new source of demand that will allow refinancing of the auction preferred shares, MFS said.

The legal, tax, financial and accounting issues for restructuring the shares to make them money market eligible have not been resolved, but MFS plans to negotiate with financial institutions to provide liquidity facilities to support the restructuring.

MFS expects to release more information within the next 30 days.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.