More offerings postponed as market woes worry issuers; Kansas Development, Boston Water delay deals

By Cristal Cody and Sheri Kasprzak

New York, Sept. 17 - Wednesday marked another day filled with new issue postponements with issuers still wary of market conditions following Lehman Brothers Holdings Inc.'s bankruptcy filing and Bank of America Corp.'s buyout of Merrill Lynch & Co., Inc.

On Wednesday, at least three more issues were put on the back burner, including a $112.575 million sale of series 2008DW Kansas water supply revolving loan fund revenue bonds from the Kansas Development Finance Authority.

Jim MacMurray, the authority's vice president of finance, said no new pricing date has been determined yet.

The bonds (/AAA/AAA) had been slated to sell on a negotiated basis Wednesday with Citigroup Global Markets as the senior manager.

The bonds are due 2009 to 2029.

Proceeds will be deposited to the state's loan fund for distribution to local governments.

Two other offerings - one from St. Luke's Health System in Idaho and one from Beaufort County School District in South Carolina - were placed on hold on Tuesday.

Boston Water sale put off

Also on Wednesday, Boston Water and Sewer Commission pushed back the sale of $115.105 million general revenue and refunding bonds to Oct. 7, according to a notice.

The senior series 2008A bonds were expected to price through a competitive sale on Thursday.

The commission plans to release an updated notice of sale on Oct. 1.

The bonds (//AA) have serial maturities from 2009 through 2031.

UniBank Fiscal Advisory Services is the financial adviser.

Proceeds will be used for improvements to the water and sewer system.

Irvine USD sale delayed

Also delayed Wednesday were series 2008 special tax bonds from the Irvine Unified School District in California.

The district had been scheduled to price the $81.08 million offering Wednesday through lead managers Banc of America Securities and Piper Jaffray. However, because of soured market conditions brought on by the recent bankruptcy filing of Lehman Brothers and some concerns over Bank of America's acquisition of Merrill Lynch, the district has decided to delay the deal, according to Ian Hanigan, spokesman for the district.

No new pricing date has been scheduled at this time.

"We were supposed to price today, but due to what's going on with the market and Bank of America, we are going to postpone the pricing," Hanigan said. "I'm told it will be reviewed day by day."

The bonds are due 2009 to 2020, and proceeds will be used to refund some outstanding obligations and to make a deposit to a debt service reserve fund.

Virginia port authority axes Lehman

The fallout from Lehman Brothers' bankruptcy filing was being felt on Wednesday in the muni market. The Peninsula Ports Authority of Virginia announced plans to remove the bank as its remarketing agent on $83.6 million in series 2004 bonds for Riverside Health System.

Lehman was the co-remarketing agent with Cain Brothers & Co. on the revenue and refunding bonds, according to a notice from Riverside Health Association.

The remarketing agreement allows Riverside to remove an agent with 10 days' notice.

Lehman will be removed effective Sept. 27.

Seton Hall bonds ahead

Moving to upcoming offerings, the New Jersey Educational Facilities Authority plans to price $75 million revenue refunding bonds for Seton Hall University by Oct. 1, according to preliminary official statements.

The $51 million series 2008D bonds will price initially with a long-term interest rate. Maturities and ratings have not been designated.

The $24 million series 2008E revenue refunding bonds (A3/A/) have serial maturities from 2009 through 2028 with terms due 2033 and 2037.

Citigroup Global Markets is the senior manager of the negotiated sales.

Proceeds will be used to refund the $50.025 million outstanding from the series 2005C revenue bonds and the $20.2 million outstanding in series 2006A revenue refunding bonds.

N.C. Education Assistance sale

In one of the largest sales of the month, the North Carolina State Education Assistance Authority planned to price $1.337 billion tax-exempt student loan revenue and refunding bonds in 10 tranches on Wednesday, but the sale could not be confirmed by deadline.

The series 2008-2 bonds includes $309.9 million tranche A1 bonds due 2036, $220.7 million tranche A2 bonds due 2035, $275.945 million tranche A3 bonds due 2034, $200 million tranche A4 bonds due 2035, $30 million tranche A5 bonds due 2027, $60 million tranche A6 bonds due 2031, $51.805 million tranche A7 bonds due 2034, $50.9 million tranche A8 bonds due 2035, $32.695 million tranche A9 bonds due 2038 and $105 million tranche A10 bonds due 2034.

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

Proceeds will be used to finance student loans, to refund outstanding bonds and to make deposits to the debt service fund, department reserve fund, operating fund and capitalized interest fund.

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