States rev up for mortgage bonds after Bush signs legislation; San Diego County sells $343.5 million

By Cristal Cody

Springdale, Ark., July 30 - Several states immediately came out with new offerings for mortgage revenue bonds under the federal housing aid legislation that President Bush signed Wednesday.

"Everyone is waiting to see what the legislation's terms are before anyone can tell the impact," a sellside source told Prospect News.

The Housing and Economic Recovery Act of 2008 raises the cap on tax-exempt state bond financing by $11 billion nationally, among other provisions.

The legislation also authorizes the Federal Housing Administration to refinance mortgages for struggling homeowners who would not qualify under standard FHA rules.

The Wyoming Community Development Authority moved forward with its sale of $60 million series 2008-3 housing revenue bonds after the legislation, said Scott Hoversland, finance director.

"We had a deal in the works and once he signed it, we were ready to go, along with several others as I understand," Hoversland said.

The legislation increases Wyoming's cap to $99 million for housing loans.

The bonds have split serial maturities from 2009 through 2018 and terms due 2023, 2028, 2033 and 2038.

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

Proceeds will be used to purchase first-time homebuyer loans.

The North Dakota Housing Finance Agency also took steps to sell $130 million housing finance program bonds for the home mortgage finance program, the issuer told Prospect News.

"We're deciphering the new legislation and keeping our options open, but it will be used for first-time homebuyer new purchases," said Michael Anderson, executive director.

The series 2008D bonds have fixed-rate serial maturities from 2010 through 2018 and terms due 2023, 2028, 2033 and 2039 and a variable-rate term due in 2039.

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

Also ahead, the Alaska Housing Finance Corp. expects to price $80.88 million home mortgage revenue bonds on Aug. 7, a source said Wednesday.

The series 2008B bonds also will be sold in a two-day retail period beginning Tuesday.

The bonds have serial maturities from 2009 through 2018 and terms due 2023, 2028, 2033 and 2038.

Goldman, Sachs & Co. is the senior manager of the negotiated sale.

Proceeds will be used to purchase first-time buyer home mortgage loans.

San Diego County prices $343.515 million

Meanwhile, San Diego County in California led Wednesday's pricing news with the sale of $343.515 million taxable pension obligation bonds with a 5.986% true interest cost, a source told Prospect News.

The series 2008A bonds (Aa3/AA/AA) priced at par to yield 3.31% to 6.029%.

"These priced off the Treasuries, and the Treasury was 7 basis points higher than yesterday unfortunately," the source said. "But, they came in better than we had thought and better than some of the other issuers are getting."

The bonds have serial maturities from 2009 through 2018 and a term due 2026.

Citigroup Global Markets was the senior manager of the negotiated sale.

Proceeds will be used to refund the county's outstanding series 2002B auction-rate pension obligation bonds.

Virginia Resources Authority prices with 4.5% TIC

The Virginia Resources Authority priced $181.28 million revenue bonds with a 4.5% TIC on Wednesday, the issuer told Prospect News.

The series 2008 clean water state revolving fund revenue bonds (Aaa/AAA/AAA) priced with 4.5% to 5% coupons to yield 2.7% to 4.84%, said Sheryl Bailey, executive director.

"We got an incredible response with oversubscription in almost all maturities," she said, crediting the response to the authority's natural triple-A ratings.

The bonds have serial maturities from 2011 through 2031.

Morgan Stanley was the senior manager of the negotiated sale.

Proceeds will be used to purchase and acquire local obligations issued by local governments to finance or refinance sewer projects.

Clark County sells $50.57 million

Also on Wednesday, Clark County in Nevada priced $50.57 million general obligation flood control refunding bonds with a 3.42% TIC, a market source told Prospect News.

The series 2008 bonds (Aa1/AA+/) priced with 3% to 5% coupons to yield 2% to 3.7%.

The bond size had been expected at $70.895 million, but two of the maturities did not meet the 3% net present value savings, the source said.

"It was a good market. We would have liked to have sold more, but the market's the market," the source said.

The bonds have serial maturities from 2009 through 2016.

Depfa First Albany Securities LLC won the bidding in the competitive sale.

Proceeds will be used to help refund the series 1998 G.O. flood control bonds.

St. Joseph's Health Care System in New Jersey also sold $237 million bonds (Ba1/BBB-/) on Wednesday, but the pricing terms were not immediately available.

The bonds were sold in a negotiated sale through lead manager Citigroup Global Markets.

NY Mortgage Agency mortgage revenue bonds

The State of New York Mortgage Agency expects to price its previously announced $167.84 million variable-rate and fixed-rate homeowner mortgage revenue bonds the next week, a source said Wednesday.

The $60 million series 157 variable-rate bonds are due in 2043.

The fixed-rate tranches include $10.695 million series 154 bonds due in 2018 and a term due 2023, $32.145 million series 155 bonds with serial maturities from 2009 through 2018 and a term due 2019 and $65 million series 156 term bonds due 2023, 2028, 2032 and 2047.

Goldman, Sachs & Co. is the senior manager of the negotiated sale.

Proceeds will be used to purchase mortgage loans and pledged closing cost assistance loans and to refund and replace outstanding bonds.

Albuquerque Municipal School District No. 12

The Albuquerque Municipal School District No. 12 in New Mexico intends to price $134 million G.O. school building bonds through a competitive sale on Aug. 6, according to a preliminary official statement.

The series 2008B bonds have serial maturities from 2010 through 2023.

RBC Capital Markets is the district's financial adviser.

Proceeds will be used to erect, remodel and furnish school buildings, to purchase and improve school grounds, to purchase computer equipment and to provide matching funds for capital outlay projects.

Harris County of Texas expects to price $330 million refunding bonds on Aug. 7, said Edwin Harrison, director of financial services.

The sale includes $130 million series 2008B, $100 million series 2008C and $100 million series 2008D permanent improvement refunding bonds.

Loop Capital Markets LLC is the senior manager of the negotiated sale.

Proceeds will be used to defease the county's series A1, B and D G.O. commercial paper notes.

Johns Hopkins University also intends to price $125.855 million variable-rate revenue bonds on Aug. 7, a market source said Wednesday.

The series 2008B bonds (Aa2//) will price through the Maryland Health and Higher Educational Facilities Authority.

Morgan Stanley will manage the negotiated sale.

Proceeds will be used to refund a portion of the outstanding series 1997 and 1998 fixed-rate bonds.

Michigan Municipal Bond Authority to price $690.59 million

Further out, the Michigan Municipal Bond Authority intends to price $690.59 million revenue notes, according to a preliminary official statement.

The series 2008 notes are due Aug. 20, 2009.

The sale includes $197.465 million series 2008A1 and $493.125 million series 2008A2 notes.

Siebert Brandford Shank & Co. is the senior manager of the negotiated sale.

Proceeds will be used to purchase notes issued by school districts in the state to meet operating cash flow deficits anticipated in the fiscal 2008/2009 year.

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