Issuers with good credit feel good about pricing; Port Authority of New York and New Jersey sells $400 million

By Cristal Cody and Sheri Kasprzak

New York, May 7 - Issuers who have good credit are feeling more comfortable with market conditions and some - including the Arizona Sports and Tourism Authority - are hoping to regain the weekly reset rate they had before the bond insurance collapse at the beginning of the year.

The sports and tourism authority is planning a $53.05 million remarketing, Chuck Foley, the authority's chief financial officer, said in an interview Wednesday, because their credit is much better than the credit of their insurer, Ambac.

"We went from rates back in January of about 3% per week weekly reset to as high as 9%," Foley said. "We feel very good about the remarketing. Our bonds have always been very well accepted."

The authority is replacing its series 2005A variable-rate demand revenue bonds with the 2008 bonds under a direct-pay letter of credit to get it back to the market rate, Foley said.

The bonds are set to price May 15 on a negotiated basis through RBC Capital Markets.

Heading up an active day for pricings, the Port Authority of New York and New Jersey priced $400 million in series 152 consolidated bonds Wednesday, said Steve Coleman, spokesman for the port authority.

Citigroup Global Markets was the winning bidder for the competitive sale with a 5.395595% true interest cost.

The bonds (Aa3/AA-/AA-) are due from 2018 to 2038 with coupons ranging from 4.75% to 5.75%. The yields range from 4.6% to 5.45%.

Proceeds will be used for capital projects related to the authority's facilities and for refunding obligations of the authority, Coleman said.

Horry County, S.C., prices bonds

Elsewhere in Wednesday's pricing action, Horry County, S.C., was looking for lower rates on the sale of $62 million general obligation bonds, which priced with a 3.99395% true interest cost, a bond counsel source said Wednesday.

"They were looking for lower [rates], but they were very pleased because this is 20-year debt," she said.

The series 2008 bonds (Aa3/AA/AA-) priced with 4% to 5% coupons to yield 2% to 4.56%.

Morgan Stanley was the winning bidder out of 10 bids in the competitive sale.

The size and the credit ratings attracted more interest.

"This is probably one of the biggest South Carolina deals this year," the source said.

Proceeds will be used to construct and expand the county's libraries and recreation centers with the bulk, about $50 million, for a detention center.

Olathe, Kan., succeeded in its plan to achieve interest rates below 2% and 4% on the sale of $86.5 million bonds and notes, respectively, the issuer told Prospect News.

The city priced $37 million series 211 general obligation bonds (Aa2//) with a 3.947% true interest cost, accounting manager Maureen Rogers said.

The $49.5 million series 2008A short-term general obligation temporary notes (MIG 1//) priced with a 1.986% net interest cost.

"We were pleased we were below 2% on the notes and below 4% on the bonds," Rogers said. "It's better than we've seen before, especially in the notes because obviously short-term interest rates have been cut so many times since the last time we sold notes."

The city usually sells the short-term notes twice a year, in early May and early October.

Prager, Sealy & Co. won the bidding on the bonds, and Citigroup Global Markets was the successful bidder on the notes.

"We had six bids on the notes and seven on the bonds," Rogers said.

Proceeds will provide financing for more than 50 capital improvement projects in the city, including street improvements and a railway track project.

Also on Wednesday, the Rhode Island Health and Educational Building Corp. priced $91.929 million revenue bonds with a 4.45% true interest cost on Wednesday, better than previous estimates, the issuer told Prospect News.

The series 2008A bonds (Aaa//) priced with 2.5% to 4.625% coupons to yield 2.3% to 4.72% on the serial maturities from 2009 through 2026, executive director Bob Donovan said.

A term bond due in 2029 priced with a 4.75% coupon to yield 4.87%, he said.

"It was what we anticipated from [Tuesday] and in fact was better than most of the estimates the communities had been using for pricing their financing," Donovan said.

The bonds are a pooled issue that includes the Bristol Warren Regional School District, the Foster-Glocester Regional School District and the towns of Cumberland and North Smithfield.

"There was a very good response to the bond issue, and there was a little less than $15 million [not committed] for the firms to work off," Donovan said.

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

Proceeds will finance projects in the school districts and towns.

Puerto Rico prices $174 million

In other pricing news Wednesday, the Commonwealth of Puerto Rico sold $173.975 million in series 2008B public improvement refunding bonds, a sellside source told Prospect News.

The full terms, he said, would not be available until later this week.

The bonds (Aaa/VMIG1/AA+/A-1+/) were sold on a negotiated basis through lead managers UBS Investment Bank, Lehman Brothers and Wachovia Capital Markets.

The bonds are due July 1, 2032 and the proceeds will be used to refund some of the commonwealth's bonds, to repay a line of credit and to remarket outstanding public improvement and public improvement refunding bonds.

Also on Wednesday, SSM Health Care Corp. priced $100 million revenue bonds, a sellside source told Prospect News.

The series 2008A bonds (/AA-/AA-) priced through the Health and Educational Facilities Authority of the State of Missouri.

Pricing details were not immediately available.

Citigroup Global Markets is the senior manager.

Proceeds will be used to finance and refinance capital improvements.

Riverside, Calif., was expected to price $208.12 million electric revenue bonds on Wednesday. The series 2008D bonds (/AAA/AAA) have maturities from 2017 through 2028 with term bonds due 2033 and 2038.

The sale could not be confirmed by press time.

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

Proceeds will be used to finance capital costs for the electric system.

North Carolina bonds set

Moving to upcoming sales, the North Carolina Municipal Power Agency Number 1 will sell its previously announced $426.45 million in fixed-rate bonds this week, a calendar said Wednesday.

The exact pricing date could not be determined.

The bonds will be sold through senior manager Morgan Stanley.

The sale includes $344.81 million in series 2008A electric revenue refunding bonds, $9.39 million in series 2008B electric revenue refunding bonds and $72.25 million in series 2008C revenue bonds.

Proceeds will be used to finance the agency's share of the costs of capital improvements to the Catawba Nuclear Station and to refund its series 1997 revenue bonds, series 1998A revenue bonds, series 2003C revenue bonds, series 2005A refunding revenue bonds, series 2005B refunding revenue bonds, series 2005C refunding revenue bonds and series 2005D refunding revenue bonds.

Coming up, Northeastern University plans to price $360.125 million revenue bonds through the Massachusetts Health and Educational Facilities Authority, according to a preliminary official statement.

The sale includes $93.74 million series 2008R bonds and $56.385 million series 2008S fixed-rate bonds and $210 million series 2008T variable-rate bonds.

The series 2008R bonds have serial maturities from Oct. 1, 2008 through Oct. 1, 2023 and term bonds in 2028 and 2033.

The series 2008S bonds are due Oct. 1, 2012.

The series 2008T bonds, due Oct. 1, 2037, initially will price with a term rate.

Lehman Brothers will manage the negotiated sale.

Proceeds will be used to refund the series N, series 2005O and series 2007P auction-rate bonds and to pay the costs of terminating the swaps on the series N and series 2005O bonds.

Calls for additional information were not immediately returned.

St. Anselm College bonds to price

St. Anselm College in New Hampshire pushed back the sale of $62.705 million revenue bonds until May 15, a sellside source said Wednesday.

The series 2008 bonds (A3//) will price with a daily variable-rate mode through the New Hampshire Health and Education Facilities Authority.

The bonds had been expected to price Wednesday, but scheduling conflicts delayed the sale.

Piper Jaffray will manage the negotiated deal.

Proceeds will be used to refund the outstanding series 1998, series 1999 and series 2004 bonds and to fund the construction of a residence hall and renovation of existing facilities.

Nassau County Interim Finance Authority in New York plans to price $609.2 million variable-rate refunding bonds on May 16, according to a release from Moody's Investors Service.

The series 2008A-F sales tax secured bonds (Aa2/VMIG 1//) will price with an initially weekly rate.

The sale includes $125 million series 2008A bonds, $125 million series 2008B bonds, $80 million series 2008C bonds, $80 million series 2008D bonds, $160 million series 2008E bonds and $39.2 million series 2008F bonds.

Proceeds of the bonds will refund $450 million series 2004B-G and $150 million series 2004I-K sales tax secured refunding auction-rate securities.

The California Infrastructure & Economic Development Bank plans to price $93.565 million series 2008B revenue bonds for the RAND Corp. on May 22, according to a Moody's release.

The bonds (Aaa/VMIG 1//) initially will price with a weekly rate.

Banc of America Securities LLC is the manager of the negotiated sale.

Calls for additional information were not immediately returned.

Miami-Dade school board to price COPs

In other news, the School Board of Miami-Dade County of Florida intends to price $537.575 million in series 2008B certificates of participation, a preliminary official statement said.

The bonds (Aaa/AAA/) will be sold on a negotiated basis with Goldman, Sachs & Co. as the lead manager.

The bonds are due from 2014 to 2028, with a term bond due 2033.

The issuer did not return calls to confirm the pricing date by press time Wednesday afternoon.

Proceeds will be used to finance or refinance construction and acquisition of capital projects.

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