FSA, Assured under review for possible downgrade; Minnesota brings $465.7 million in G.O. bonds

By Cristal Cody and Sheri Kasprzak

New York, July 22 - Fewer issuers were heading out with new offerings Tuesday, and one market source said conditions are not getting better for pricings.

"Things fell off again today and I think issuers are getting a little antsy," he said.

"We do have some [issuers] who are just waiting for things to improve. Right now, the best thing to do is just wait and see."

Munis were negatively impacted Tuesday by news that Moody's Investors Service is reviewing Financial Security Assurance Inc. and Assured Guaranty Ltd. for possible downgrades.

The financial strength rating of FGIC Corp. was downgraded by Moody's in April to Baa3 from A3.

Meanwhile, Minnesota led pricing news with $465.7 million in series 2008 general obligation bonds (//AAA), said Kathy Kardell, debt manager for G.O. bonding at the state treasurer's office.

The sale included $275 million in series 2008A bonds, $33.5 million in series 2008B bonds and $157.2 million in series 2008C refunding bonds.

The 2008A bonds are due from 2009 to 2028 with coupons from 4.625% to 5% and yields from 1.5% to 4.74%.

The 2008B bonds are due from 2009 to 2028 with coupons from 3.25% to 5% and yields from 1.8% to 4.68%.

The 2008C bonds are due from 2009 to 2019 with 5% coupons across the board. The yields range from 1.5% to 3.96%.

Lehman Brothers was the winning bidder for the series 2008A and 2008C bonds, and UBS Securities was the winner of the 2008B bonds.

Proceeds from the sale will be used for capital projects throughout the state, construction on the state's trunk highway system and for refunding the state's series 1999 and 2000 G.O. bonds.

Montgomery County prices $250 million G.O. bonds

In other pricing news Tuesday, Montgomery County of Maryland priced $250 million G.O. bonds with a 4.1809% true interest cost on Tuesday, a source told Prospect News.

The series 2008A bonds (Aaa/AAA/AAA) priced with 3% to 5% coupons to yield 1.74% to 4.72%.

The bonds have serial maturities from 2009 through 2028.

Wachovia Securities was the winning bidder in the competitive sale.

Proceeds will be used to redeem commercial paper to provide permanent financing for county capital projects, which include construction, renovations and equipment for libraries, new public schools and fire and police facilities.

Vermont variable-rate bonds

The Vermont Student Assistance Corp. priced $113.05 million variable-rate bonds on Tuesday, a source told Prospect News.

The senior series 2008A1 education loan revenue bonds are due Dec. 15, 2042.

KeyBanc Capital Markets managed the negotiated sale.

Pricing terms were not available by press time.

Proceeds will be used to finance loans and to fund a reserve account and a capitalized interest account.

Wylie sells $53.625 million

Also on Tuesday, Wylie, Texas, priced $53.625 million in G.O. bonds and certificates of obligation Tuesday, said Melissa Beard of the city's finance department.

The bonds priced with a 4.89% TIC with UBS Securities winning the competitive bid.

Beard said the full pricing terms would not be available until Wednesday.

The G.O.s are due from 2009 to 2028, and the certificates are due 2009 to 2028.

Proceeds will be used for public improvements, the construction and equipment of a park and recreational center, as well as improvements to library facilities.

Harris County, Texas, deal

Elsewhere in pricing news, Harris County, Texas, planned to price $325 million toll road senior lien revenue and refunding bonds on Tuesday. However, calls to confirm the sale were not returned by press time.

The series 2008B bonds (Aa3) were sold in a negotiated sale by senior manager Goldman, Sachs & Co.

Proceeds will be used to refund the county's series E commercial paper notes, finance a portion of the toll road project and fund an increase in the debt service reserve requirement.

South Dakota housing bonds ahead

The South Dakota Housing Development Authority expects to price its previously announced $100 million homeownership mortgage bonds on Wednesday, a source told Prospect News.

The bonds (Aa1/AAA/) also were sold through retail orders on Tuesday.

The $18.615 million series 2008D bonds have serial maturities from 2009 through 2019.

The $47.385 million series 2008E bonds are terms due 2023, 2027 and 2038.

The $34 million series 2008F bonds are due 2039.

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

Proceeds will be used to provide funds to make or purchase mortgage loans that are secured by first mortgage liens on single-family residential housing and to make deposits to various funds and accounts.

King County, Wash., sale

Leading upcoming bond sales, King County in Washington is looking to price $350 million in series 2008 sewer revenue bonds on July 28, said a preliminary official statement released on Tuesday.

The bonds will be sold on a competitive basis with Seattle-Northwest Securities Corp. as the financial adviser.

The bonds are due from 2017 to 2048.

Proceeds will be used for construction or improvements to the sewer system.

Snohomish district bonds

Also in Washington, the Snohomish School District No. 201 intends to sell $103.087 million in series 2008 unlimited tax G.O. bonds on July 29, said a preliminary official statement.

The bonds will be sold on a competitive basis with Seattle-Northwest Securities Corp. as the financial adviser.

The bonds are due 2009 to 2010 and from 2016 to 2027.

The proceeds will be used for the completion of renovations to the Snohomish High School, for the renovation and expansion of the Valley View Middle School, the construction of new elementary schools, the construction of an aquatic center, other district-wide improvements and the acquisition of technology.

Creighton University adjustable-rate bonds

In other upcoming offerings, Creighton University in Nebraska expects to price $105 million adjustable-rate revenue and refunding bonds on July 30, a sellside source said Tuesday.

The series 2008 bonds (A2//) will be remarketed daily.

The bonds will be sold through the Nebraska Educational Finance Authority.

J.P. Morgan Securities will manage the negotiated sale.

Proceeds will be used to refund the series 2003 and 2005C insured variable-rate bonds and series 2005 auction-rate bonds.

Scripps Health revenue bonds

Scripps Health plans to price $96.495 million revenue bonds through the California Health Facilities Financing Authority, according to a preliminary official statement.

The series 2008A bonds will be sold in a negotiated sale managed by Citigroup Global Markets.

Proceeds will be used to refund the series 1991B variable-rate revenue bonds and series 1998A and 1998B insured variable-rate revenue bonds.

Scripps Health also plans to price $229.945 million in five tranches of variable-rate bonds.

The sales are expected in August and will be used to refund $232.21 million outstanding from the series 2005B, C, D, E and F insured revenue bonds.

Life University sale planned

Life University plans to price $70.04 million university facilities and refunding bonds through the Development Authority of the City of Marietta in Georgia, according to a preliminary official statement.

The series 2008 bonds have terms due 2018, 2028 and 2039.

Citigroup Global Markets will manage the negotiated sale.

Proceeds will be used to refund the outstanding $9.555 million from series 1995A refunding first mortgage revenue bonds and the outstanding $17.15 million from series 1995B first mortgage revenue bonds.

Proceeds also will be used to finance construction and renovation projects for the university, including a 300-bed student housing facility and a 600-space parking deck.

Calls for additional information were not returned by press time.

Texas A&M flexible-rate notes

The Board of Regents of Texas A&M University System plans to price $65.3 million flexible-rate notes in a competitive sale on July 28, according to a preliminary official statement.

The permanent university fund notes (Aaa/AAA/) are an installment of a $125 million note authorization. The board expects to sell another $50 million note installment in 2009.

The current installment includes $52 million notes with a mandatory tender date on Sept. 17, 2008 and $13.3 million notes with a mandatory tender date on Aug. 14, 2008.

First Southwest Co. is the board's financial adviser.

Proceeds will be used to make improvements to university facilities.

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