Chicago O'Hare pulls $1 billion sale due to lawsuit; NYC Transitional plans $875 million sale

By Sheri Kasprzak

New York, Jan. 31 - A lawsuit has grounded the City of Chicago's plans to fly a $998.855 million sale of series 2011 passenger facility charge revenue bonds for Chicago O'Hare International Airport, market insiders reported Monday.

According to the lawsuit, United Airlines and American Airlines contend that because they would be responsible for repaying up to $2 billion of additional bonds for the airport's current expansion plan, their approval should be needed in order to complete the bond sale. The city, however, claims it doesn't require the airlines' approval because the bonds would be due after 2018. The airport's lease with the airlines ends before that time.

The suit will delay the bond sale, said a source connected to the deal, but he could not comment on when the deal will take off again.

The city had been set to bring the bonds to market on Wednesday following a retail order period on Tuesday.

The offering includes $417.04 million of series 2011A passenger facility charge non-AMT revenue bonds, $43.58 million of series 2011B passenger facility charge non-AMT revenue bonds, $127.065 million of series 2011C passenger facility charge AMT revenue refunding bonds and $411.17 million of series 2011A grant receipts and subordinate-lien passenger facility charge revenue bonds.

Citigroup Global Markets Inc. and Siebert Brandford Shank & Co. LLC are the senior managers.

Douglas sells G.O. bonds

Moving to Monday's light primary offerings, Douglas County in Georgia priced $97.245 million of series 2011 general obligation sales tax bonds, said a pricing sheet.

The bonds (Aa2/AA-/) were sold through Citigroup Global Markets Inc. and SunTrust Robinson Humphrey.

The bonds are due 2011 to 2016 with coupons from 2% to 5%. None of the maturities are being reoffered.

Proceeds will be used to construct, equip and acquire a jail and related law enforcement facilities.

The county seat is Douglasville, Ga.

NYC Transitional deal ahead

Looking to the week's primary calendar, the New York City Transitional Finance Authority will headline with its $875 million sale of series 2011D future tax secured bonds set for Wednesday.

The sale includes $775 million of series 2011D-1 tax-exempt bonds and $100 million of series 2011D-2 taxable bonds, according to a preliminary official statement.

The bonds will be sold through senior manager Goldman Sachs & Co.

The 2011D-1 bonds are due 2013 to 2031. The 2011D-2 bonds are due 2015 to 2020.

Proceeds will be used to fund capital expenditures for the city.

North Carolina preps deal

Also ahead during the week, North Carolina is slated to bring $500 million of series 2011A capital improvement limited obligations competitively on Wednesday.

The bonds (Aaa/AA+/AAA) are due 2012 to 2031, and proceeds will be used to fund improvements to higher education facilities, purchase land and make improvements to other state facilities.

FirstSouthwest Co. is the financial adviser.

U of Minnesota plans sale

Rounding out the major offerings of the week, the University of Minnesota is expected to come to market Tuesday with $338.555 million of series 2011A G.O. bonds through Barclays Capital Inc.

The university plans to use the proceeds to purchase and improve land and buildings, construct and equip campus facilities and make other campus improvements.

The university's main campus is in Minneapolis and St. Paul.

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