Georgia sells $522.49 million in G.O.s with 3.02%-4.269% TICs; issuers say conditions shaky

By Cristal Cody and Sheri Kasprzak

New York, June 12 - Yet another heavy day for pricings belied some harsh market conditions. In fact, Thursday may have been a break in the difficulties, according to issuers.

Issuers said Thursday rates have been rising and this has made pricing bonds a shaky proposition. Those with good ratings have fared better, but it's still all in the timing.

Brett Stoltz, head of business services for the St. Tammany Parish Wide School District in Louisiana, said conditions have not been favorable lately but the district was able to price its $67 million bond sale well on Thursday. He said rates have risen in the past week.

Moving back to Thursday's pricing action, Georgia priced $522.49 million general obligation bonds with 3.02% to 4.269% true interest costs on Thursday, Lee McElhannon, the state's director of bond finance, told Prospect News.

Bids in the competitive sales didn't vary much.

"The difference between the winning bid and the cover was 0.0028%," McElhannon said. "On the 20-year bonds, we got six bids and those ranged from 4.26% on the winning bid out to 4.29%. That's extremely tight for six bids."

The bonds (Aaa/AAA/AAA) priced through the Georgia State Financing and Investment Commission.

The $53.675 million series 2008A1 bonds and $2.93 million series 2008A2 bonds priced with a 3.02% combined TIC, he said.

The series 2008A1 bonds priced with 5% coupons to yield 1.8% to 3.13%.

The bonds have serial maturities from 2009 through 2013.

The series 2008A2 bonds priced with 3% to 4% coupons to yield 1.83% to 3.79%. Those bonds are due from 2009 through 2018.

The $465.885 million series 2008B bonds priced with a 4.269% TIC, McElhannon said. The bonds sold with 3% to 5% coupons to yield 1.78% to 4.45% from 2009 through 2028.

Lehman Brothers was the winning bidder in the competitive sale for the series 2008A1 and 2008A2 bonds.

Merrill Lynch & Co. was the winning bidder for the series 2008B bonds.

Proceeds will be used for capital projects, including for the departments of agriculture, corrections, natural resources and juvenile justice.

St. Tammany bond sale

In other pricing news Thursday, the St. Tammany Parish Wide School District priced $67 million in series 2008 general obligation school bonds Thursday.

"Yeah, very much so," Stoltz said when asked if he feels the sale went well, given the current market conditions.

"We realize in the last week or so, rates have taken a turn up, but it's in line with what we expected with our good credit rating and the timing of the sale."

The bonds (Aaa/AAA/) were sold on a competitive basis with BB&T Capital Markets as the winning bidder.

The bonds are due 2010 to 2028 with coupons from 4% to 5% and yields from 2.54% to 4.8%.

Proceeds will be used to acquire or improve land for building sites and playgrounds, to construct sidewalks and streets and to erect and improve school buildings and school-related facilities.

DART bonds price

Elsewhere in pricings, Dallas Area Rapid Transit priced $739.495 million in series 2008 senior lien sales tax revenue bonds on Thursday, but Morgan Lyons, a spokesperson for DART, said the terms would not be available until Friday.

The bonds (Aa3/AAA/AA-) were sold on a negotiated basis with Merrill Lynch, Loop Capital Markets and Southwest Securities as the lead managers.

The bonds are due 2009 to 2028 with term bonds due 2033, 2038, 2043 and 2048.

Proceeds will be used to construct, repair, acquire and expand the public transportation system.

San Diego USD sale

The San Diego Unified School District expects to price $215 million tax and revenue anticipation notes on June 24, a source connected to the sale said Thursday.

The series 2008-2009A notes (MIG 1/SP-1+/) are due July 1, 2009.

"It depends on what the market does. We're ready to price anytime," the source said.

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

Proceeds will be used to finance the district's general fund cash flow requirements.

Florida school bonds

The Florida Department of Education intends to price $200 million full faith and credit public education capital outlay bonds, according to a notice of sale.

The series 2006E bonds will be sold in a competitive sale.

The first date the bonds may be sold is June 19.

Florida sells bonds competitively on an 18-hour notice.

University of Arkansas offering

The University of Arkansas at Fayetteville tentatively plans to price $52.5 million facilities revenue bonds on July 15, a source handling the sale said Thursday.

The series 2008A and 2008B bonds (Aa3//) will be sold in a negotiated sale co-managed by Stephens Inc. and other bookrunners.

Proceeds will be used for various capital facilities including a parking garage, renovation of a building for a public radio station and land acquisitions.

The bonds had been planned to sell in June.

"At first the university was considering a competitive sale, but then decided to go with a negotiated sale," the source said.

Norfolk bond sale

Also coming up, Norfolk, Va., plans to sell $158.14 million in series 2008C G.O. capital improvement bonds on June 17, said a preliminary official statement.

The bonds (A1/AA/AA) will be sold on a competitive basis. Public Financial Management is the financial adviser.

The bonds are due from 2009 to 2028.

Proceeds will be used for capital improvement projects, which may be amended from time to time by the city council.

Seattle improvement and refunding

Seattle, Wash., plans to price $140.105 million G.O. improvement and refunding bonds in a competitive sale on June 18, according to a preliminary official statement released Thursday.

The series 2008 bonds (Aa1/AAA/AA+) have serial maturities from 2009 through 2028.

Seattle-Northwest Securities Corp. is the city's financial adviser.

Proceeds will be used for projects and to refund the outstanding series 1996C and 1996D variable-rate bonds.

University of Alabama sale

The University of Alabama intends to price $108.4 million Birmingham Hospital revenue bonds, according to a preliminary official statement released Thursday.

The series 2008A fixed-rate bonds (A1/A+/) have serial maturities from Sept. 1, 2008 through Sept. 1, 2023 and a term bond due in 2025.

The university also intends to price $108.62 million series 2008B variable-rate bonds, though an official statement has not yet been released.

Morgan Keegan & Co. is the senior manager of the negotiated sale.

Proceeds will be used to refinance debt.

San Joaquin upcoming sale

Also ahead, the San Joaquin Delta Community College District of California intends to price $100 million in series 2008B G.O. bonds on June 18, said a sellside source familiar with the sale.

The bonds (Aa3//A+) will be sold on a competitive basis.

Proceeds from the deal will fund the district's master facilities plan, including upgrades to the main Stockton campus, as well as expanding and improving operations on the Tracy campus. The district encompasses San Joaquin, Sacramento, Calaveras, Solano and Alameda counties.

New York University sale details

New York University released additional details of $622 million revenue bonds it plans to price this week through the Dormitory Authority of the State of New York.

The sale includes $284 million series 2008A, $228 million series 2008B, $97 million series 2008C and $13 million series 2008D fixed-rate bonds (Aa3/AA-/).

Morgan Stanley is the senior manager of the negotiated sale.

Proceeds will be used to pay or reimburse the university for projects including the acquisition and renovation of an office building, residential facility and retail space, a reconstruction program and information systems for existing buildings at the university's Washington Square campus in Manhattan and to repay a line of credit that financed the university's series 2004B1 and 2004B2 insured revenue bonds.

Charleston Medical Center sale

Also looking ahead, the Charleston Area Medical Center in West Virginia plans to price $127.355 million in series 2008A variable-rate revenue bonds, said a preliminary official statement.

The bonds (Aa2/VMIG1/AA-/A-1+/) will be sold on a negotiated basis with Merrill Lynch as the senior manager.

The bonds, due Sept. 1, 2037, initially bear interest at the weekly rate. The bonds can be converted to the daily rate.

Proceeds will be used to refund the center's outstanding series 1995A bonds, to retire a bank loan and to make a deposit to a project fund.

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