May expected to be good for pricing new munis, advisor says; new slate of deals planned for week

By Cristal Cody and Sheri Kasprzak

New York, May 5 - Despite some weakness in the market in April, May could very well be a good market for pricing new-issue municipals, an advisor asserted Monday.

Austin, Texas, and the city's Water and Sewer Enterprise is gearing up to price $170.605 million in series 2008 variable-rate revenue refunding bonds on May 14, and the issuer said Monday that market conditions seem to be rallying.

"Last week, we had a rally in the market and we went ahead and locked in the fixed-rate portion issue," said Chris Allen, senior managing consultant with Public Financial Management, the issuer's financial advisor.

Allen told Prospect News that the city's offering has been going on for a year and a half.

"It's contingent upon a certain interest rate and costs being met," he noted.

The bonds (Aa3//) will be sold on a negotiated basis with Goldman, Sachs & Co. as the lead manager. The city entered into a synthetic fixed-rate interest rate swap with Goldman Friday.

The city's assistant treasurer said the city will pay a fixed rate of 3.6%.

Proceeds will be used to refund $66.22 million series 1997 combined utility revenue refunding bonds, and $64.845 million series 2001A and $27.74 million series 2001B water and wastewater revenue refunding bonds.

Heading to Tuesday's sales, the New York State Environmental Facilities Corp. will price $481.565 million in series 2008 state clean water and drinking water revolving funds revenue bonds Tuesday, a preliminary official statement said Monday.

The offering includes $262.64 million in series 2008A bonds and $218.925 million in series 2008B bonds.

The bonds (Aa1/AA/AA+) are due 2009 to 2037 with term bonds.

The bonds will be sold on a negotiated basis with Depfa First Albany Securities as the senior manager.

Proceeds from the sale will be used to provide financial assistance to the New York City Municipal Water Authority to refinance water pollution control and drinking water project.

Fletcher Allen to sell $213 million

Also coming up on Tuesday, Fletcher Allen Health Care in Vermont intends to sell $213 million in series 2008 variable-rate revenue refunding bonds Thursday, according to a bond calendar.

The bonds (Baa1/BBB/BBB+) will be sold on a negotiated basis with Citigroup Global Markets as the lead manager.

The bonds are due from 2010 to 2027 with term bonds due 2032 and 2034.

Proceeds will be used to refund auction-rate bonds.

Also on Tuesday, the Nebraska Methodist Health System plans to price $201.82 million in refunding and revenue bonds on Thursday, according to a calendar.

The bonds (/A-/) will be sold through lead manager Citigroup Global Markets.

The bonds will be sold through the Hospital Authority No. 2 and No. 3 of Douglas County.

The offering in includes $40.125 million in series 2008A bonds and $161.695 million in series 2008B bonds.

Proceeds will be used to finance the cost of an office, women's hospital and parking projects, as well as to refund a portion of the system's outstanding bonds.

In other healthcare bonds, Elmhurst Memorial Healthcare will price $112.615 million in series 2008A variable-rate demand revenue bonds Tuesday, a calendar confirmed Monday.

The bonds (Baa1/A-/) will be sold on a negotiated basis with Citigroup Global Markets as the senior manager.

The bonds are due 2038 and 2048.

The bonds will be sold through the Illinois Finance Authority.

Proceeds will be used to refund the authority's series 2006 revenue bonds and pay for a portion of the costs of acquiring and equipping healthcare facilities.

Florida to sell $200 million

The state of Florida plans to price $200 million State Board of Education lottery revenue bonds in a competitive sale Tuesday, according to a notice released Monday.

The series 2008A bonds have serial maturities from 2009 through 2027.

The sale amount originally was estimated at $315.4 million, but the element to refund series 1998B revenue bonds and other debt has been eliminated, according to the updated notice of bond sale.

Florida sells bonds competitively on an 18-hour notice.

Proceeds will be used to construct and renovate educational facilities in school districts in the state.

Also on Tuesday, the Arizona Transportation Board plans to sell $196 million in series 2008A revenue bonds on Tuesday, a calendar of offerings confirmed Monday.

The bonds (Aa1//) will be sold through lead manager Citigroup Global Markets.

Proceeds will be used for construction projects under the board's five-year plan.

Sacramento water bonds to price

Moving to other upcoming sales, the Sacramento Suburban Water District in California plans to price $75.25 million certificates of participation and remarket $41.275 million certificates on May 12, the issuer said Monday.

The $37.625 million series 2008A1 and $37.625 million series 2008A2 weekly adjustable rate refunding certificates (A1//) have 20-year-plus maturities, said Dan Bills, director of finance.

The $41.275 million series 2004 certificates of participation (A1//) will be converted from an auction rate to a variable rate and remarketed, he said.

"We're getting out of the ARS [auction-rate securities] market and moving into the VRDO [variable-rate demand obligation] market," he said. "We've had some [rates] that have been much higher than they should have."

Proceeds from the series 2008 certificates will be used to refund the district's outstanding series 2005A adjustable rate revenue certificates.

Citigroup Global Markets is the senior underwriter.

Also coming up, Scottsdale Healthcare of Arizona plans to price $151.57 million series 2008A revenue refunding bonds, according to a preliminary official statement.

The series 2008A bonds (A3/BBB+/A-) will price through the Industrial Development Authority of the City of Scottsdale, Ariz.

Citigroup Global Markets is the manager of the negotiated sale.

Proceeds will be used to refund $139.3 million in the hospital's outstanding series 2006A and 2006B revenue bonds and series 2007A revenue refunding bonds.

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