California Water Resources sells $1.025 billion in bonds; New York prices $451.985 million in G.O.s

By Cristal Cody and Sheri Kasprzak

New York, March 11 - Tuesday hosted a frenzy of municipal pricing activity, led by a sizable offering from the California Department of Water Resources. The city of New York also got in on the action, pricing $451.985 million in general obligation bonds.

In the California offering, the department sold $1.025 billion in series 2008H fixed-rate power supply revenue bonds (Aa3/A+/A) on a negotiated basis. Full terms were not available by press time Tuesday. The bonds were priced in a serial structure from 2017 to 2022.

Bear, Stearns & Co. and Merrill Lynch were the lead managers for the sale.

The proceeds will be placed in escrow for refunded bonds.

In the New York deal, the city sold $451.985 million in bonds, including $369.985 million in fixed-rate refunding general obligation bonds and $82 million in subseries J-2 taxable bonds with a true interest cost of 4.31%.

JPMorgan was the winning bidder for the competitive sale. The bonds are due in 2015.

The city offered $369.985 million subseries J-1 and K bonds (Aa3/AA/AA-) for a three-day retail sale that began Thursday.

Orders totaled $237 million in the first two days of the retail order period, with $133 million left to price institutionally, said Laura Rivera, spokesman for the New York City comptroller's office.

Series J-1 bonds of $358 million priced at par with coupons as low as 3.25% and as high as 5% for maturities 2009 through 2018, according to pricing terms released to Prospect News.

Series K bonds of $12 million priced at par with 4% coupons for serial maturities from Aug. 1, 2008, through Aug. 1, 2018.

Merrill Lynch & Co. is the senior manager.

Proceeds will be used to redeem previous bond series.

Virginia Beach, Va., also found a good market as it sold $90 million general obligation bonds with a 4.16% true interest cost on Tuesday, the issuer told Prospect News.

"The municipal market has been improving the last week or so," said Rich Dunford, debt manager for the city.

"We felt like we get a good bid. We actually got nine bids, so there was a lot of interest in the sale."

The public improvement series 2008 bonds (Aa1/AAA/AA+) priced with 5% coupons to yield 1.95% in 2008 and 4.77% in 2027.

Citigroup Global Markets was the successful bidder, out of bids that ranged from true interest costs of 4.16% to 4.23%, Dunford said.

The bonds have serial maturities from Oct. 1, 2008, through Oct. 1, 2027.

Proceeds will fund various public improvement projects.

Other Tuesday pricings

In other pricing news, the Alpine School District in Utah was expected to price $84 million in bonds due from 2009 to 2023 competitively Tuesday. The terms could not be obtained by press time.

The Rhode Island Housing and Mortgage Finance Corp. priced $74.44 million in homeownership opportunity bonds (Aa2/AA+) on Tuesday, a sell-side source confirmed.

The bonds were sold through lead manager Goldman, Sachs & Co., but the full terms could not be determined.

The offering included 59-A bonds due 2009 to 2017 with term bonds due 2032 and 2034; 59-B bonds due 2022, 2027, 2028 and 2032; and 59-C bonds due 2047.

The corporation will use the proceeds for housing loans.

Elsewhere, the Walt Disney Family Museum was expected to price $59.1 million in series 2008 revenue bonds (A1/AA-) through the California Infrastructure and Economic Development Bank.

The proceeds from that deal will be used to renovate facilities for the museum complex.

Thomas Jefferson University expected to price

Thomas Jefferson University was in the process Tuesday of pricing $71.55 million bonds, said Robert Baccon, assistant executive director of the Pennsylvania Higher Educational Facilities Authority.

Pricing details on the series 2008B revenue bonds were not available by press time.

UBS Securities managed the negotiated sale.

Humble Independent School District in Harris County, Texas, was expected to price $96.7 million bonds on Tuesday.

The district planned to sell $73.35 series 2008A million unlimited tax school building bonds and $23.4 series 2008B million unlimited tax refunding bonds, according to a preliminary official statement released Thursday.

The series 2008A bonds have maturities from 2018 through 2033. Series 2008B bonds have maturities from 2009 through 2018.

Morgan Keegan & Co. is the senior manager, and Citi, Merrill Lynch & Co., UBS Investment, Banc of America Securities LLC and RBC Capital Markets are co-managers.

Proceeds will be used to acquire land, build schools and refund and defease bonds to lower the district's overall debt service requirements.

The sale could not be confirmed by press time.

Idaho Housing and Finance Association also was expected to price $178 million grant and revenue anticipation bonds probably on Tuesday.

The federal highway trust fund series 2008A bonds (Aa3) will be issued on behalf of the Idaho Transportation Department.

The bonds have serial maturities from 2008 through 2026, said John Sager, chief financial officer of the Idaho Housing and Finance Association.

Citigroup is the lead underwriter of the negotiated sale.

Proceeds will provide funding for six highway projects. Series 2008A bonds are the second issue in the state's Garvee program, which will sell nearly $1 billion bonds to cover the road projects.

Illinois Finance Authority approves $4.138 billion bonds

The Illinois Finance Authority approved in a board meeting Tuesday plans to price or convert up to $4.138 billion bonds.

"Quite a large number of projects this month were due largely to bond borrowers working themselves out of their issue with the auction-rate market," said authority spokesman Diane Hamburger.

That includes Commonwealth Edison Co., which plans to convert $343.175 million series 2006 A, B, C, D, E and F pollution control revenue refunding bonds.

Timing is up to each borrower, but most want to move rapidly, Hamburger said.

The board approval includes $3.54 billion health care new issue and refunding bonds of $540 million from Elmhurst Memorial Healthcare; $300 million from Northwest Community Hospital; $666.91 million from Provena Health; $55 million from Alexian Brothers Health System; and $650 million from The Children's Memorial Hospital.

Refunding bonds include $165 million from Delnor-Community Hospital; $250 million from Edward Hospital; $650 million from Advocate Health Care Network; $150 million from Little Company of Mary Hospital; and $115 million from Swedish Covenant Hospital.

In higher education bonds, the board approved the University of Chicago's $125 million bonds, and Bradley University's $67 million bonds, according to the board agenda.

California Statewide Communities Development Authority bonds

Also in conversion news, the California Statewide Communities Development Authority plans to convert $656.98 million auction-rate bonds for the St. Joseph Health System in late March.

The series 2000 insured revenue bonds (Aaa/AAA/) will be converted to a long-term rate, according to a preliminary reoffering circular.

The $85.95 million series 2000 term bond due 2018 and insured by Financial Security Assurance will convert on March 25.

The $76.475 million series 2000 term bond due 2024 and insured by MBIA Insurance Corp. will convert on March 27.

The authority also plans to convert $494.55 million series 2007 A, B, C, D, E and F bonds to a long-term rate.

Series 2007 A and B term bonds due 2047 will convert on March 25.

Series 2007 C term bonds due 2047, and series 2007 F serial bonds due July 1, 2008, through July 1, 2021, will convert on March 27.

Series 2007 D and E term bonds due 2047 will convert on March 24.

Financial Guaranty Insurance Co. insures series A, B and C bonds (Aa3/AA-/-).

Series D, E and F bonds (Aaa/AAA/-) are insured by Financial Security Assurance.

Morgan Stanley is the remarketing agent.

La Porte schools delays pricing

La Porte Independent School District in Texas delayed pricing of $65 million unlimited tax school building bonds on Tuesday, the issuer confirmed in an interview.

The school board will consider approving a perimeter sale order to allow a negotiated sale within 180 days of the order for series 2008 bonds (Aa3), said John H. Owens, district assistant superintendent and chief financial officer.

"We didn't go to the market today because the market wasn't good today," he said. "We're just going to see what the rates do in the next couple of weeks."

The district's financial advisor is RBC Capital Markets.

Bond proceeds will be used to finance the construction of new education facilities and fleet and technology purchases.

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