Tuesday's pricing schedule bursting at the seams; Puerto Rico to sell $800 million

By Cristal Cody and Sheri Kasprzak

New York, June 16 - Market conditions are looking up as numerous issuers gear up to sell their bonds on Tuesday, said one market source.

"Things were not that great a week or so ago," said one sell-sider, when asked what might be sparking this flurry of new issue activity.

"Rates were a bit higher last week, the week before, but things seem to be tapering back off. It's a better time now to sell than it has been. I'm sure some issuers had planned to sell earlier but maybe put their deals off, waiting for better conditions."

Garland sells with 3% to 5% coupons

Monday's pricing action was rather limited, led by a $125.655 million offering of bonds and certificates from Garland, Texas. The bonds priced with 4.33% to 4.55% true interest costs on Monday, the city's financial advisor told Prospect News.

The $57.76 million series 2008A general obligation refunding bonds priced with a 4.411% true interest cost, said Maria Urbina, assistant vice president at First Southwest Co.

The bonds (/AA+/AA+) priced with 4% to 5% coupons to yield 2.025% to 4.75% from 2009 through 2025.

The $15.965 million series 2008 tax and revenue certificates of obligation priced with a 4.334% true interest cost. The certificates (/AA+/AA+) priced with 3% to 4.75% coupons to yield 2.217% to 4.91% from 2009 through 2028.

The $41.815 million series 2008 water and sewer revenue bonds priced with a 4.552% true interest cost. The bonds (/AA/AA) were sold with 3% to 5% coupons to yield 2% to 4.79% from 2009 through 2028.

The $10.115 million series 2008 electric bonds priced with a 4.529% true interest cost. The bonds (/A+/A+) priced with 3.25% to 4.75% coupons to yield 2.08% to 4.86% from 2009 through 2028.

Banc of America Securities LLC and Lehman Brothers were the senior managers of the negotiated sales.

Proceeds will be used to refund a portion of the city's outstanding general obligation commercial paper notes to replace them with long-term fixed-rate debt and for improvements to police and fire departments, municipal buildings, water and sewer system, electric system and other projects, including acquiring vehicles for the city's environmental waste services department.

Puerto Rico's $800 million deal

Leading a schedule of new offerings is an $800 million sale of revenue and revenue refunding bonds from the Puerto Rico Electric Power Authority, a source with the Government Development Bank for Puerto Rico said Monday.

The $700 million series WW revenue bonds and $100 million series XX revenue refunding bonds will price with a fixed interest rate.

JPMorgan is the senior manager of the negotiated sale.

Proceeds will be used for deposits to the 1974 construction fund and an escrow fund for refunded bonds.

Oregon Higher Education sale

The Oregon State Board of Higher Education also expects to price $200 million general obligation bonds on Wednesday, a source with the state said Monday.

The series 2008A bonds will price for the University of Oregon.

Citigroup Global Markets will manage the negotiated sale.

Proceeds will be used for an arena at the university.

Also coming up this week, Bexar County in Texas will price $125.2 million in combination flood control tax and revenue certificates of obligation later this week, said a sell-side source knowledgeable about the sale.

No exact pricing date has been set for the bonds (//AA+), but the sale is expected to take place this week.

"We're still waiting on a few things before picking a date," said the sell-side source.

The sale includes $70.7 million in series 2008A revenue certificates of obligation and flood control tax bonds and $54.5 million in series 2008B certificates of obligation.

The bonds will be sold on a negotiated basis with Siebert Brandford Shank & Co. as the lead manager for the series 2008A bonds and certificates and Merrill Lynch as the lead manager for the series 2008B certificates.

Proceeds will be used for a 10-year drainage project, as well as for tourism projects.

Sacramento County offering

Looking ahead, Sacramento County, California plans to price $440 million tax and revenue anticipation notes in a competitive sale on July 8, a source with the issuer said Monday.

The series 2008A notes (MIG 1//) will be sold to fund the county's mid-year cash flow needs.

In other upcoming sales, Frederick County, Md., plans to price $79.38 million general obligation public facilities bonds in a competitive sale on June 24, according to a preliminary official statement.

The series 2008 bonds have serial maturities from 2009 through 2028.

Davenport & Co. is the county's financial advisor.

Proceeds will be used to design, plan, renovate and construct public schools, community college buildings, county buildings, county parks, roads, bridges, water facilities and solid waste facilities.

University of Houston bond sale

The Board of Regents of the University of Houston System in Texas plan to price $186.835 million consolidated revenue and refunding bonds, according to a preliminary official statement.

The series 2008 bonds (Aa3/AA-/) are scheduled to price the week of June 23, according to a sale calendar.

The bonds have serial maturities from 2009 through 2038.

RBC Capital Markets is the senior manager of the negotiated sale.

Proceeds will be used to refund $11.45 million in maturities from 2015 through 2019 for the series 1999 consolidated revenue bonds. The maturities currently have interest rates of 4.75% to 5%.

Proceeds also will be used to finance the acquisition, construction and equipment for property, buildings, operations, roads and other campus infrastructure.

Austin school bonds

Also coming up is a $100 million sale of series 2008 unlimited tax refunding bonds from the Austin Independent School District of Texas, said a preliminary official statement. The sale is scheduled for June 23.

The bonds (Aa1/AA+/AA) will be sold on a competitive basis and are due in a serial structure from 2010 to 2033.

Proceeds will be used to construct new schools, renovate existing school and acquire land for future schools.

Memphis' $92.37 million offering

The City of Memphis intends to price $92.37 million in series 2008 electric system subordinate revenue refunding bonds on Tuesday, according to a calendar of upcoming sales.

The bonds (//AA) will be sold on a negotiated basis with Morgan Keegan & Co. as the senior manager.

Proceeds from the offering will be used to refund the city's outstanding series 2003B auction-rate bonds.

Massachusetts Educational offering

In other upcoming deals, the Massachusetts Educational Financing Authority plans to price $296 million in series 2008 student loan asset-backed notes, according to a preliminary official statement.

The bonds are due Oct. 25, 2038 and will bear interest at a spread over Libor.

UBS Investment Bank is the lead manager for the negotiated offering.

Proceeds from the deal will be used for a deposit to an acquisition fund, a deposit to a capitalized interest fund and a deposit to a reserve fund.

Orlando healthcare bond sale

Also coming up, the Orlando Regional Healthcare System in Florida plans to sell $180.6 million in series 2008 hospital revenue bonds, said a preliminary official statement.

The sale includes $54.5 million in series 2008D bonds, $54.5 million in series 2008E bonds, $35.8 million in series 2008F bonds and $35.8 million in series 2008G bonds.

The bonds (Aaa/VMIG1//) will be sold on a negotiated basis. SunTrust Robinson Humphrey is the underwriter for the series 2008D and series 2008E bonds. Morgan Stanley is the underwriter for the series 2008F bonds and Goldman, Sachs & Co. is the underwriter for the series 2008G bonds.

The bonds initially bear interest at the weekly rate.

Proceeds will be used to refinance a current line of credit and to refund the system's outstanding series 1995A and 1995B bonds, as well as its series 1999A and 1999B bonds.

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