Busy pricing week rounds out as Florida, Advocate price; Jacksonville Port waits for better market

By Cristal Cody and Sheri Kasprzak

New York, March 27 - Pricing action continued on Thursday, rounding out a heavy week for municipal new issues. Even so, at least one issuer, Jacksonville Port Authority, put off its planned offering indefinitely as it seeks out better market conditions.

Activity on Thursday was led by Florida, which sold $200 million public education capital outlay bonds that priced with a 4.88% true interest cost.

The series 2006D full faith and credit State Board of Education bonds (Aa1/AAA/AA+) priced with 5% to 5.25% coupons to yield 2% to 5.15%, said Carol Bagley, bond development supervisor with the state's bond finance division.

The bonds, which were authorized in 2006, mature June 1, 2008 through June 1, 2037.

Merrill Lynch & Co. won the bidding in the sale.

Proceeds will be used to finance capital outlay projects for the State System of Public Education.

In other pricing news, Advocate Health Care Network in Illinois priced $153.43 million in variable-rate bonds with an initial coupon of 1.9%, according to Dominic Nakis, Advocate Health's chief financial officer.

The bonds will be remarketed on Jan. 15, 2009; April 1, 2009; and Feb. 5, 2009, Nakis said.

Illinois Finance Authority priced the bonds for Advocate Health.

Citigroup Global Markets was the lead manager for the negotiated offering.

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

The Illinois Finance Authority also priced $123.604 million in adjustable-rate revenue bonds for the University of Chicago on Thursday at the weekly rate, an official statement. The initial coupon could not be determined by press time.

The bonds (Aa1/AA+/AA) are due July 1, 2038 and may be converted to a daily, adjustable or fixed mode.

Goldman, Sachs & Co. was the lead manager for the negotiated offering.

Proceeds will be used to refund the authority's outstanding series 1998A bonds.

Rhode Island bonds price

Also on Thursday, the Rhode Island School of Design and the Rhode Island Health and Education Building Corp. priced $93.78 million in refunding bonds.

The variable-rate bonds have an initial rate of 2.1%, the issuer told Prospect News.

The higher education facility revenue refunding bonds (Aaa/AA/) initially will reset weekly.

The $61.93 million series 2008A bonds mature Aug. 15, 2034, and the $31.85 million series 2008B bonds mature Aug. 15, 2036, said Bob Donovan, executive director of Rhode Island Health and Education Building Corp.

UBS Investment Bank managed the negotiated sale.

Eastern Water cuts to 1.95% from 10%

The Eastern Municipal Water District in Riverside County, Calif., said it was extremely pleased with the 1.95% initial rate from pricing $54.575 million certificates of participation.

"These same bonds under the auction rate had been 10% the week before," Charles Rathbone, chief financial officer of the district, said in an interview Thursday. "I'm glad to have this behind us."

The series 2008B water and sewer revenue variable rate certificates (Aa3/AA-/AA) will reset weekly.

The certificates are due July 1, 2035.

UBS Investment Bank is the underwriter.

Proceeds will be used to finance the prepayment of series 2006B installment payments and refund series 2006B auction-rate certificates.

Jacksonville Port postpones sale

In other news, the Jacksonville Port Authority postponed its planned $90 million offering of series 2008 revenue bonds (//A) indefinitely, according to Michael Poole, the authority's director of finance.

Poole said the authority is waiting for better market conditions. The bonds were expected to sell Thursday on a negotiated basis through lead manager Morgan Stanley. No new date has been set.

The bonds, due 2009 to 2027 with term bonds, will be used to finance or refinance expenses related to marine facilities projects and to purchase an insurance policy to fund a reserve account.

Arizona to price $239 million

Looking ahead, the state of Arizona intends to price $239 million in certificates of participation on April 22.

The bonds (A1//) will be sold on a competitive basis and the proceeds will be used for capital projects on the state's prisons and forensic facilities.

In other upcoming sales, Cleveland Public Power System plans to price $100 million revenue bonds the week of April 7, according to a release from Moody's Investors Service.

The series 2008A bonds (A2//) will be a fixed-rate refunding of the outstanding series 2006 B public auction-rate power system revenue bonds.

Proceeds will also finance a distribution system expansion program, including a new transmission line.

Auction rate bids

The St. Petersburg Health Facilities Authority in Florida submitted bids on $61.575 million auction-rate bonds at an interest rate of 2.33%, the issuer said in a statement Thursday.

The authority was able to purchase $37.25 million of the series 2007A bonds available at auction on Wednesday.

The health facilities revenue bonds priced for All Children's Hospital and mature Nov. 15, 2034.

Citigroup Global Markets is the broker.

WellSpan Health plans to bid on its $70 million auction-rate bonds to lower its interest rates.

The company will submit bids for the series 2007A revenue bonds that mature June 1, 2037 in each of the auctions starting March 31 until it owns all of the outstanding bonds.

WellSpan Health expects to bid a 2.91% rate for the March 31 auction, according to a notice. A designated rate will be chosen for each auction.

The bonds were sold through the General Authority of Southcentral Pennsylvania.

Citigroup Global Markets is the broker.

Upcoming pricings

The Metropolitan Sewerage District of Buncombe County, N.C., expects to price $55.8 million revenue refunding bonds in two tranches, the issuer said Thursday.

The $33.635 million series 2008A bonds are scheduled to price March 31, and the $22.165 million series 2008B bonds are planned to price April 30, said Scott Powell, finance director.

The bonds (Aa3/AA/AA) will price with a weekly interest rate.

The series 2008A bonds are due July 1, 2031 and the series 2008B bonds are due July 1, 2029.

Banc of America Securities is the underwriter.

Proceeds will be used to refund the district's outstanding series 2004 revenue bonds and series 2005 revenue refunding bonds.

Illinois school district bonds price

The Community Unit School District No. 5 in McLean and Woodford counties of Illinois priced $82.26 million general obligation school bonds on Thursday with a 4.56% true interest cost, the issuer said in an interview.

The final pricing terms were still being finalized, said Jennifer Hejna, quantitative analyst with PMA Securities, the district's financial advisor.

The series 2008 bonds (Aaa/AAA/) have maturities from 2009-2015, 2017-2018 and 2020-2023.

The bonds are insured by Financial Security Assurance.

First Midstate Inc. and Wachovia Securities are the underwriters.

Proceeds will be used to build a new junior high school and two elementary schools and improve other school buildings, as well as refund a portion of the district's outstanding series 1997 and 1998 general obligation bonds.

The North Texas Tollway Authority had been expected to price $200 million commercial paper notes on Thursday, Moody's Investors Service said in a release.

Each note matures no later than 270 days after issuance.

Moody's assigned a P-1 rating to the series A notes.

Lehman Brothers and Bear Stearns & Co. are co-dealers for the notes.

Proceeds will provide interim financing to refund existing obligations, new projects and other capital improvements.

Additional information was not available by press time.

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