California sells $194 million in first private placement; San Francisco to sell $131.83 million

By Cristal Cody and Aaron Hochman-Zimmerman

New York, Feb. 27 - Municipals lacked the pace some had predicted in trading, but the primary side provided rare news for a Friday.

The State of California broke new ground by selling its first private placement issue to the Bay Area Toll Authority.

Meanwhile in trading, "we didn't see a whole lot of activity," a senior trader said.

"There was some spotty retail," but no institutional business on Friday, he said.

The accounts that did move were mostly interested in high-yielding products, he said, and "all revenue, not much G.O."

Some had expected the series H New York City bonds to make a big splash - "it was pretty cheap," the trader said - but still volumes were light.

"This time of year is always a bit slow," he said, and "there's no reason we'll see anything different" next week, he said.

Still, he admitted that the market has been unpredictable enough to make a person regret that kind of prediction.

California sells $194 million, first private-to-public sale

On the primary side, the State of California made its first private placement of $194 million in general obligation bonds to another public entity on Friday and said there will be more, state treasurer Bill Lockyer said in a statement.

The state sold the bonds to the Bay Area Toll Authority at 3.34% interest over 18 months, Lockyer said. At that time, the state will buy back the bonds and resell them in the open market with long-term maturities.

The state placed the bonds through a private sale to finance work on 11 road projects in the Bay Area and northern California counties.

The state's Pooled Money Investment Board has imposed a freeze on infrastructure financing since Dec. 17 because of the budget crisis. On Feb. 20, a state budget plan was signed to resolve the $40 billion deficit, and the board plans to meet in March to determine when the freeze can be lifted.

Lockyer said similar private deals are under consideration, including a transaction with the Los Angeles County Metropolitan Transportation Authority and with other foundations and groups to fund stem cell research and environmental protection projects.

"This deal is the first of its kind, but it won't be the last," Lockyer said.

San Francisco to price $131.83 million

Also in the Golden State, the City and County of San Francisco plans to price $131.825 million in general obligation bonds for the San Francisco General Hospital and Trauma Center through a competitive sale on Wednesday, according to the notice of sale.

The series 2009A improvement bonds (Aa2/AA/AA-) have serial maturities from 2010 through 2029.

Public Financial Management, Inc., and Kitahata & Co. are co-financial advisers of the sale.

The proceeds will be used to finance hospital construction and improvements for earthquake safety.

Port Authority of N.Y. and N.J. to sell $100 million

Further out in March, the Port Authority of New York and New Jersey intends to sell $100 million in consolidated bonds through a competitive sale on March 11.

The series 154 consolidated bonds will have serial maturities from 2010 through 2029.

The proceeds will be used for capital projects and to refund obligations.

Catholic Health East to price in five tranches

Looking ahead, Catholic Health East intends to price $171.87 million revenue bonds in five tranches.

The series 2009 bonds include: $71.82 million through the Development Authority of Fulton County in Georgia; $15.44 million through the Development Authority of the Unified Government of Athens - Clarke County in Georgia; $37.975 million through the Massachusetts Health and Educational Facilities Authority; $12.345 million through the Montgomery County Higher Education and Health Authority in Pennsylvania; and $34.29 million through the Saint Mary Hospital Authority in Pennsylvania.

Merrill Lynch & Co. is the senior manager of the negotiated sale.

The proceeds will be used to exchange the series 2007A revenue bonds sold through the Development Authority of Fulton County; series 2007B bonds sold through the Development Authority of the Unified Government of Athens - Clarke County; series 2007C bonds sold through the Massachusetts Health and Educational Facilities Authority; series 2007D bonds sold through the Montgomery County Higher Education and Health Authority; and series 2007F bonds sold through the Saint Mary Hospital Authority.

Whitfield County School District plans $68.34 million

Also ahead, the Whitfield County School District in Georgia plans to price $68.34 million in G.O. bonds, according to a preliminary official statement.

The series 2009 bonds have serial maturities from 2010 through 2017.

Morgan Keegan & Co., Inc. will manage the negotiated sale.

The proceeds will finance the acquisition, construction, equipping and furnishing of new school buildings and buses and other transportation vehicles.

© 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.