Pricing activity heats up for week ahead; BJC Health prices $368.575 million in variable-rate bonds

By Cristal Cody and Sheri Kasprzak

New York, April 21 - The week is gearing up to be a busy one for new pricings as BJC Health System led pricing activity Monday.

"There is a big market right now for refunding bonds," said one market source.

"Loads of issuers are trying to refund auction-rates and that's making up a good portion of the bonds selling right now. That's not to say issuers aren't funding specific projects, but there's a good number of them trying to get out of the auction-rate bonds they've got."

The Alabama State Port Authority is among those issuers trying to escape the auction-rate crisis.

The authority priced $61.3 million in revenue bonds, said Linda Paaymans, the vice president of finance, in an interview Monday.

"We're one of the many trying to get out of the PARS market," she said.

"Ours re-priced today. People are seeing them as a little bit safer than they were, but we'll be cashing them out in 30 days."

The new bonds, due May 20, 2008, were priced at 67% of Libor on Friday, Paaymans said.

Part of the proceeds will be used to refund the $60.295 million series 2006C auction-rate docks facilities revenue bonds, which are subject to redemption on May 20. 2008.

BJC Health leads light pricing action

Back to the BJC Health bonds that led pricings Monday, the Missouri healthcare provider priced $368.575 million variable-rate demand bonds with initial rates from 2.3% to 2.35% on Monday, a source said.

The series 2008 A-E bonds (Aa2/AA/) priced with an initial weekly rate through the Missouri Health and Educational Facilities Authority.

The sale includes $81.2 million series 2008A; $81.2 million series 2008B; $81.175 million series 2008C; $75 million series 2008D and $50 million series 2008E bonds.

The bonds mature May 15, 2038.

JPMorgan was the senior manager.

Proceeds from the series 2008A, B and C bonds will be used to refund a bridge loan that was used to redeem the series 2006A, B and C bonds. Proceeds from the series 2008D and E bonds will be used to fund $124 million of new projects in 2008 and 2009.

The Community Unit School District No. 308 in Illinois was expected to price $79.988 million general obligation capital appreciation school bonds on Monday. Calls for confirmation were not returned.

The series 2008 bonds (A1//) are insured by Financial Security Assurance.

The bonds mature from 2020 through 2028.

Raymond James is the underwriter of the negotiated sale.

Proceeds will be used for renovations and to build new schools in the district in Kendall, Kane and Will counties.

New Jersey to price several bonds

Looking ahead, this week is populated by a number of bonds from the state of New Jersey.

The offerings include $543.7 million in series 2008W school facilities construction refunding bonds from the New Jersey Economic Development Authority.

The authority plans to sell the bonds (//A+) on a negotiated basis through lead manager UBS Securities. The exact pricing date could not be determined, but a calendar of sales indicates the bonds will price this week.

Proceeds will be used to refund the authority's existing construction bonds.

Also coming up is a $291.075 million offering of series 2008D revenue refunding bonds from the New Jersey Educational Facilities Authority.

Those bonds (Aaa/AAA/) will be sold through lead manager Morgan Stanley.

The bonds are due 2010 to 2019 with term bonds due 2023, 2029 and 2035.

Proceeds from the deal will be used to refund the authority's outstanding series 1999D and 2002D bonds.

The New Jersey Sports and Exposition Authority plans to price $279.7 million in debt securities in the coming week, a calendar of upcoming offerings said.

The bonds will be sold on a negotiated basis with Morgan Stanley as the lead manager.

The exact pricing date has not been set.

The authority plans to use the proceeds to refinance its outstanding series 2002B variable-rate contract bonds and to terminate a related swap.

Also, the New Jersey Health Care Facility Finance Authority plans to sell $180 million in revenue bonds this week, a calendar confirmed.

The bonds will be sold for AHS Hospital Corp.

Goldman, Sachs & Co. is the lead manager for the negotiated deal.

The exact pricing date could not be determined by press time Monday.

Proceeds will be used to refinance a bank line of credit that was used to purchase outstanding adjustable rate securities.

Culinary Institute to sell $57 million

The Culinary Institute of America is still finalizing the terms for the sale of $57 million variable rate bonds, a source said Monday.

"It's not a done deal yet," the source said.

The bonds are expected to price through the Dormitory Authority of the State of New York.

Also coming up, the Orange Regional Medical Center expects to price $264.28 million revenue bonds on Wednesday, a source told Prospect News.

The series 2008 bonds had been expected to price on Monday.

The bonds will be sold through the Dormitory Authority of the State of New York.

The bonds have maturities from 2011 to 2015 and term bonds due 2021, 2029 and 2037.

Merrill Lynch & Co. is the senior manager.

Proceeds will be used to construct a 374-bed replacement hospital in the Town of Wallkill, N.Y.

The Wayne County Airport Authority in Detroit expects to price $145 million airport revenue refunding bonds on Wednesday, the issuer told Prospect News.

The series 2008A Detroit Metropolitan Wayne County Airport bonds are insured through Assured Guaranty Corp.

Citigroup Global Markets is the senior manager of the negotiated sale.

Proceeds will be used to refund portions of the outstanding $141.72 million series 2002A airport revenue bonds that were insured by Financial Guaranty Insurance Co., said Terry Teifer, vice president of treasury operations.

The authority also expects to price variable-rate demand senior lien bonds in the next few weeks to refund $327.65 million series 2003 auction-rate bonds that are insured by XL Capital Assurance.

"We're going to take our auction rate out then," Teifer said.

The Commonwealth of Puerto Rico has plans to price $1.06 billion public improvement refunding bonds, according to preliminary official statements.

The sale includes $700 million series 2008A, $175 million series 2008B and $185 million series 2008C general obligation public improvement refunding bonds.

The series 2008A bonds will price with interest rates that are fixed to maturity and the series 2008B bonds will price with a daily variable rate. Information on the 2008C bonds was not available.

UBS Financial Services Inc. of Puerto Rico is the senior manager of the negotiated sale.

Proceeds will be used to refund public improvement bonds, which will be converted.

Hawaii plans to price $427 million general obligation bonds (Aa2//) the week of May 7, according to a release from Moody's Investors Service.

The sale includes $375 million series 2008DK new money bonds, $27 million series 2008DL refunding bonds and $25 million series 2008DM new money bonds.

Proceeds will be used to finance or to reimburse the state for expenditures that include the payment of $30 million in fiscal year 2009 for the Hawaiian Home Lands Settlement and various capital projects to improve schools and colleges, public facilities, parks and libraries.

Calls for additional information were not immediately returned.

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