Pacific Gas and Electric prices $309 million; Catholic Health to sell $300 million bonds Wednesday

By Cristal Cody and Sheri Kasprzak

New York, Oct. 31 - The week tapered off with light pricing action on Friday, led by news of a $309 million sale of pollution control bonds from the Pacific Gas and Electric Co.

The offering is one of several variable-rate deals scattered in the marketplace over the past couple of weeks, giving credence to some market insiders' assertions that variable-rate bonds are making a comeback.

The bonds, which were sold through the California Infrastructure and Economic Development Bank, are due 2016 and 2026 and have an initial rate of 1.75%. The rate resets weekly.

Proceeds will be used to reimburse the utility for its purchase of auction-rate pollution control bonds issued in 2005.

Meanwhile, pricing action is heating up for the week ahead, led by a $300 million sale of revenue bonds (Aa2/AA/AA) from Catholic Health Initiatives in Colorado, Ohio and Tennessee on Wednesday, a source told Prospect News. The bonds are expected to price on Wednesday.

The sale includes $210 million series 2008D revenue bonds through the Colorado Health Facilities Authority, $65 million series 2008D revenue bonds through Montgomery County, Ohio, and $25 million series 2008D revenue bonds through the Health, Educational and Housing Facility Board of the City of Chattanooga, Tenn.

The Colorado bonds have serial maturities from 2014 through 2018 and terms due in 2022, 2028 and 2034.

The Ohio and Tennessee bonds have serial maturities from 2009 through 2018 and terms due in 2022, 2028 and 2034.

JPMorgan is the senior manager of the negotiated sale.

Proceeds will be used to finance or refinance capital improvement and equipment acquisitions at Catholic Health facilities in Colorado, Iowa, Nebraska, Minnesota, New Jersey, Oregon, Ohio and Tennessee.

Arizona School Facilities to price COPs

Moving on to one of the bigger new offerings of the day, the Arizona School Facilities Board intends to price $593 million in certificates of participation, according to a preliminary official statement.

The series 2008 COPs (A1/AA-/) have serial maturities from 2010 through 2023.

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

The proceeds will be used to finance the costs to acquire leasehold interests in school sites and facilities.

Indiana Housing sale

Also ahead in the first week of November, the Indiana Housing and Community Development Authority plans to price $140 million in series 2008A single-family mortgage revenue bonds, said a preliminary official statement released Friday.

The bonds will be sold on a negotiated basis with J.P. Morgan Securities Inc. as the lead manager.

The sale includes $1.955 million in series 2008A-1 bonds, $85 million in series 2008A-2 bonds and $53.045 million in series 2008A-3 bonds.

The 2008A-1 bonds are due 2010 and 2011, and the 2008A-2 bonds are due 2039. The 2008A-3 bonds are due from 2011 to 2018 with term bonds due 2023, 2029 and 2040.

Proceeds will be used for refunding existing obligations of the authority.

New Mexico hospital deal ahead

In other upcoming sales, the New Mexico Hospital Equipment Loan Council plans to price $170 million in series 2008 hospital system revenue bonds later this month, said a preliminary official statement released Friday.

The sale includes $100 million in series 2008A fixed-rate bonds and $70 million in series 2008E term-rate bonds. The 2008A bonds are tentatively set to price the week of Nov. 10, and the 2008E bonds are scheduled to price the week of Nov. 24, a sellside source told Prospect News Friday.

The bonds (Aa3/AA-/AA-) will be sold for Presbyterian Health Services. The 2008A bonds are due 2010 to 2018 with term bonds due 2023, 2027 and 2034. The 2008E bonds are due 2034.

Goldman, Sachs & Co. is the senior manager for the negotiated offering.

Proceeds will be used to reimburse Presbyterian for the construction and equipment of a new base station for the Albuquerque Ambulance Service. The rest will be used for the construction of a new parking garage at Presbyterian and for capital expenditures.

Michigan building authority to price bonds

Looking a bit further ahead, the Michigan State Building Authority is expected to price $200 million in series 2008I revenue and revenue refunding bonds, said a preliminary official statement.

The bonds will be sold through senior managers Morgan Stanley and Siebert Brandford Shank & Co.

The maturities have not been set at this time and no pricing date has been set either, according to a sellside source.

Proceeds will be used to refund the authority's series 2005 multi-modal revenue bonds and to construct a new fine arts facility.

Also coming up this month, the City of Dallas plans to price $255.71 million in series 2008 general obligation bonds for Dallas, Denton, Rockwall and Collin counties, said a preliminary official statement.

The bonds (Aa1/AA+/) will be sold on a negotiated basis with Goldman Sachs as the lead manager.

The sale includes $214.67 million in series 2008 G.O. bonds, $35.54 million in equipment acquisition contractual obligations and $5.5 million in combination tax and revenue COPs.

No maturity dates have been set for the sale.

It is expected that the offering will price in November.

Proceeds will be used for various public improvement projects throughout the city.

Puerto Rico details $1.01 billion sale

In other news, the Commonwealth of Puerto Rico released a preliminary official statement Friday detailing its planned $1.01 billion sale of series 2009A tax and revenue anticipation notes.

The bonds will be sold on a negotiated basis with Wachovia Capital Markets, Loop Capital Markets and Merrill Lynch & Co. as the senior managers.

The sale includes $375 million in series 2009A-1 bonds, $285 million in series 2008A-2 bonds, $200 million in series 2009A-3 bonds and $150 million in series 2009A-4 bonds.

The bonds are due July 30, 2009.

Proceeds will be used to repay a portion of funds received under a 2009 revolving line of credit.

Clark water district sells G.O.s

Elsewhere Friday, details emerged in the $100 million sale of G.O. bonds from the Clark County Water Reclamation District in Nevada. A market source told Prospect News that the bonds priced with a 5.624% true interest cost.

"The credit markets turned around this time," the source said.

The series 2008 water reclamation bonds priced with 4% to 6% coupons to yield 3.7% to 5.8%.

The bonds (Aa2/AAA/) have serial maturities from 2013 through 2028 and terms due in 2032 and 2038.

Robert W. Baird & Co. was the winning bidder out of seven bids in the competitive sale.

The proceeds will be used to construct, reconstruct, improve and extend the district's sanitary sewer system.

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