Issuers feel out market in search of best pricing days; LA airport department to sell $905.1 million

By Cristal Cody and Sheri Kasprzak

New York, July 21 - When it comes to pricing this week, some issuers and their financial advisers are taking it one day at a time.

"I priced a couple last week that went really well, but later in the week, things fell off and it just wasn't a good time to be in the market," one sellsider said.

"By Thursday, things were pretty bad. We're just really looking at how things are going now and I'm waiting for the underwriters to tell me how the market looks."

Meanwhile, market activity continues to be healthy as issuers head to the market en masse.

Heading the pack of offerings for this week is a $905.1 million sale of revenue bonds from the Department of Airports of the City of Los Angeles. The sale is set for Wednesday.

The bonds will be sold on a negotiated basis with Goldman, Sachs & Co. as the senior manager.

The sale includes $618 million in series 2008 senior revenue bonds (//AA), $8.3 million in series 2008B senior revenue refunding bonds (//AA), $250 million in series 2008C subordinate revenue bonds (//AA-) and $28.8 million in series 2008D senior refunding revenue bonds (//AA).

Proceeds will be used for interior improvements at the Tom Bradley International Terminal, to fund the South Airfield Improvement Program and for the refunding of the airport department's series 1995D bonds. The 2008D bonds will refund all or a portion of the department's outstanding series 2002A bonds.

Minnesota gears up for sale

Another large deal is coming from the state of Minnesota, which plans to sell $465.7 million in series 2008 general obligation bonds (//AAA) on Tuesday.

The bonds will be sold on a competitive basis.

The sale includes $275 million in series 2008A various purpose G.O. bonds, $33.5 million in state trunk highway G.O. bonds and $157.2 million in series 2008C G.O. refunding bonds. The 2008A and 2008B bonds are due 2009 to 2028, and the 2008C bonds are due 2009 to 2019.

Proceeds from the sale will be used for capital projects throughout the state, including educational facilities, pollution control facilities, transportation projects and natural resources enterprises. Some proceeds will also be used for construction on the state's trunk highway system. The proceeds from the 2008C bonds will be used to refund the state's series 1999 and 2000 G.O. bonds.

Imperial Irrigation sale

In other upcoming sales, the Imperial Irrigation District of California plans to price $240 million in debt securities on Thursday, said Kevin Kelly, spokesman for the district.

The sale, Kelly told Prospect News, is part of the district's five- to seven-year capital improvement plan.

The bonds will be sold on a negotiated basis with Citigroup Global Markets as the senior manager.

Proceeds from this offering will be used for capital improvements to the district's electric system.

Pennsylvania State Turnpike revenue bonds

The Pennsylvania State Turnpike Commission expects to price $234.84 million subordinate revenue bonds on Wednesday, the issuer told Prospect News.

The $166.065 million subseries 2008B1 and $68.775 million subseries 2008B2 fixed-interest rate bonds will price in a negotiated sale managed by Merrill Lynch & Co., said Nikolaus Grieshaber, chief financial officer.

The bonds (A2) will be sold to make a quarterly payment to the Pennsylvania Department of Transportation to fund grants to mass transit agencies and for road and bridge capital projects.

The commission also plans to sell about $50 million of senior lien variable-rate bonds in August.

Eagle Mountain ISD bonds

Also coming up this week, the Eagle Mountain-Saginaw Independent School District of Texas anticipates selling $96 million in unlimited tax school building revenue bonds, said a source familiar with the sale.

The earliest the bonds will be price, the source said, is Wednesday, though that date could change if market conditions are not ideal.

The sale, according to the source, is the first installment of the district's $394 million 2008 bond program.

The bonds are being sold on a negotiated basis with First Southwest Co. as the senior manager.

Proceeds from the sale will be used for the construction of a new high school, the construction of two new elementary schools, land acquisitions, the construction of a career and technology center and various renovations.

Lakeland plans offering

In other offerings slated for this week, Lakeland, Fla., plans to price $200 million variable-rate energy system revenue and refunding bonds (A1) on Wednesday, according to Moody's Investors Service.

The $100 million series 2008A and $100 million series 2008B bonds will be sold to repurchase obligations and to provide $56.8 million in new money for environmental remediation projects.

Calls for additional information were not returned by press time.

Gwinnett County sale planned

Looking a little further ahead, the Gwinnett County Water and Sewerage Authority in Georgia intends to sell $190 million in series 2008 revenue bonds on Aug. 6, according to a preliminary official statement.

The bonds will be sold on a competitive basis with a serial structure from 2013 to 2028. Public Financial Management is the financial adviser for the offering.

Proceeds from the sale will be used for construction projects at the authority.

N.J. Higher Education Authority bonds

In other market news, the New Jersey Higher Education Student Assistance Authority intends to price $350 million student loan revenue bonds the week of July 28, a source with the issuer said Monday.

The series 2008A bonds have serial maturities from 2014 through 2018 and terms due 2023 and 2030.

The bonds are insured by Assured Guaranty Corp.

The exact pricing date has not been set, but the negotiated sale is expected to happen early in the week, the source said.

Morgan Stanley is the senior manager.

Proceeds will be used to make deposits to the student loan and capitalized interest funds.

Looking ahead, the Turnpike Authority of Kentucky plans to price $200 million revenue bonds on July 31, according to a sale calendar.

The series 2008 bonds (Aa3/AA+/AA-) will be sold in a negotiated sale managed by Goldman, Sachs & Co.

MTA Bridges and Tunnels

In other sale news, MTA Bridges and Tunnels and the Triborough Bridge and Tunnel Authority in New York sold $1.121 billion revenue bonds last week with a 4.71% true interest cost, according to information released Monday by the agency's finance committee.

The $629.89 million series 2008C general revenue bonds (Aa2/AA-/AA) and $491.11 million series 2008D subordinate revenue bonds (Aa3/A+/AA-) priced with 4% to 5% coupons to yield 1.54% to 4.68%.

MTA Bridges and Tunnels in New York also intends to price $350 million dedicated tax fund bonds, according to the finance committee.

The series 2008B bonds are planned for sale later in July or August.

Proceeds will be used to refinance existing outstanding debt.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.