Issuers gain confidence, announce upcoming sales; Michigan gears up for $1.425 billion sale of G.O.s

By Cristal Cody and Sheri Kasprzak

New York, Oct. 27 - Issuers showed more confidence Monday with several new offerings in the works, including $1.425 billion in full faith and credit general obligation notes from the State of Michigan. Even though no sales date was set for the Michigan deal, others are becoming confident enough to set sales dates - at least tentatively.

"There is a growing comfort, I agree," said a sellside source when asked about issuers setting definitive dates for offerings.

"I think the market has settled down somewhat, in some areas anyway. It really does depend on sector. Education seems to be doing OK and we're seeing a lot more G.O.s coming out of local governments."

Moving back to that Michigan deal, the state plans to sell $1.425 billion in G.O.s on a day-to-day basis.

"We're day-to-day," a source familiar with the deal said.

"We're just monitoring it, and we'll be ready when the market is favorable."

The series 2009A notes (MIG 1/SP-1+/F1+) are due Sept. 30, 2009.

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

The proceeds will be used for cash flow needs.

Michigan also plans school loan bonds

Also out of Michigan, the state plans to price $367.8 million in series 2008 G.O. school loan refunding bonds on Tuesday, according to a calendar of upcoming sales.

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

The sale includes $145.75 million in series 2008A bonds, which are due 2009 to 2011 and 2020 to 2022, as well as $222.05 million in series 2008B bonds, which are due 2014 to 2020.

Proceeds will be used to refund the state's outstanding series 1998, 2005B and 2005C school loan bonds.

Houston deal to price Tuesday

Tuesday is gearing up to be a busy day for pricing action. The City of Houston is scheduled to price $423 million in series 2008 public improvement refunding bonds and tax and revenue certificates of obligation Tuesday, said a sales calendar.

The sale includes $393 million in series 2008A bonds and $30 million in series 2008B tax and revenue COPs.

The bonds (Aa3/AA/) will be sold on a negotiated basis with Goldman Sachs as the senior manager.

The proceeds will be used to defease outstanding G.O. commercial paper notes and to fund the acquisition of real estate for a public facility and other public works projects.

In other Tuesday pricings, the Long Island Power Authority of New York is set to sell $369 million in series 2008A electric system general revenue bonds, said a calendar of upcoming deals.

The bonds will be sold through lead manager Goldman Sachs.

The bonds are due 2019 to 2025 with a term bond due 2033.

The authority is also expected to price about $200 million in series 2008B bonds, but the pricing date has not been set on those bonds.

Proceeds will be used to refund outstanding insured variable-rate bonds. The rest will be used for various capital purposes.

Florida BOE sale planned

Also on Tuesday, the Florida Board of Education intends to price $150 million capital outlay bonds through a competitive sale, according to a notice from the state.

The series 2008A bonds (Aa1/AAA/AA+) have serial maturities from 2009 through 2038.

Proceeds will be used for capital outlay projects.

Another deal planned for Tuesday is a $175 million offering of series 2008B revenue bonds from the Metropolitan Washington Airports Authority, said a calendar of sales.

The bonds (Aa3/AA-/AA-) will be sold through senior manager Siebert Brandford Shank & Co.

The proceeds will be used to pay for capital project costs, capitalized interest on outstanding bonds, a deposit to a reserve account and costs to terminate interest rate swap agreements with Wachovia Bank and the Bank of Montreal.

San Francisco Airport deal

In other news, the San Francisco City and County Airport Commission will sell $240 million in series 34D-E senior-lien fixed-rate revenue refunding bonds on Wednesday, according to a calendar of upcoming sales.

The bonds (A1/A/A/) will be sold on a negotiated basis with Banc of America Securities as the lead manager.

Proceeds will be used to refund existing airport obligations.

Princeton sale ahead

Also ahead this week, the New Jersey Educational Facilities Authority expects to price $206.4 million in revenue refunding bonds for Princeton University on Wednesday, a source said Monday.

The series 2008K bonds (Aaa/AAA/) also will be offered for retail sale on Tuesday.

The bonds have serial maturities from 2009 through 2023.

JPMorgan is the senior manager of the negotiated sale.

The proceeds will be used to refund and defease the series 2001B, 2002B and 2003F revenue bonds.

On Thursday, the Clark County Water Reclamation District in Nevada intends to sell $100 million in series 2008 G.O. bonds, according to a sale notice.

The water reclamation bonds (Aa2/AAA/) have serial maturities from 2013 through 2038.

Hobbs, Ong & Associates and Public Financial Management are the financial advisers.

The proceeds will be used to construct, reconstruct, improve and extend the district's sanitary sewer system.

Mohave Prison bonds to price

Another sale slated for Thursday comes from the Mohave Prison of Arizona, which is scheduled to sell its previously announced $206.005 million in series 2008 correctional facilities contract revenue bonds. The bonds will be sold through the Industrial Development Authority of the County of Mohave.

The bonds (/BBB+/) will be sold on a negotiated basis with Morgan Keegan & Co. as the senior manager.

The bonds are due from 2011 to 2025.

Proceeds will be used to refund the prison's series 2004A and 2004C bonds as well as finance the acquisition, construction, equipment and operations of a 2,000-bed private prison for male inmates.

N.C. education authority to price $309.855 million

Looking ahead, the North Carolina State Education Assistance Authority intends to price $309.855 million of student loan revenue and refunding bonds in two tranches, according to a preliminary official statement released Monday.

The series 2008-2 bonds may price with a weekly interest rate or a term rate.

The $150 million tranche A1 bonds are due in 2036. The $159.855 million tranche A2 bonds are due in 2035.

RBC Capital Markets will manage the negotiated sale.

The proceeds will be used to finance student loans, refund outstanding bonds and fund deposits to the debt service reserve, department reserve and operating funds.

© 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.