Some offerings postponed; Port Authority of N.Y., N.J.'s $500 million deal leads light pricing action

By Cristal Cody and Sheri Kasprzak

New York, July 23 - Market conditions continue to pester muni issuers this week, and a few have decided to hold off on their planned sales until calmer conditions prevail.

"We've put some things on hold today," said one sellside source reached Wednesday. "It's been tough going. The issuers with the better credit are going to come out better, obviously. Most of them [postponing sales] are smaller issuers with smaller deals."

Lakeland, Fla., which had been on the calendar Wednesday to sell $200 million in series 2008 variable-rate energy system revenue and refunding bonds (Aa1/AA+/A1+/AAA/F-1+), will now price those bonds Tuesday, said Jeff Stearns with the city's finance department.

It was not immediately clear Wednesday if the sale was postponed due to market conditions.

The sale includes $100 million in series 2008A bonds and $100 million in series 2008B bonds. The 2008A bonds initially bear interest at the weekly rate, and the 2008B bonds initially bear interest at the daily rate.

Both series of bonds are due 2037.

Goldman, Sachs & Co. is the senior manager for the 2008A bonds, and SunTrust Robinson Humphrey is the lead manager for the 2008B bonds.

Proceeds will be used to repurchase obligations and to provide $56.8 million in new money for environmental remediation projects.

New issues in pipeline

While new offerings slowed to a crawl mid-week, a market source said Wednesday that a number of new issues are in the pipeline.

"There's probably a little less than this time last year, but there's still a fair amount," the source told Prospect News.

Issuers faced a "choppy market" Wednesday.

"Rates were up again today. It's not been a great market the last couple of days," the market source said.

Still, some issuers went through with scheduled pricings.

Heading up the light pricing action, the Port Authority of New York and New Jersey priced $500 million in series 153 consolidated bonds Wednesday, said Louella Jones, spokeswoman for the authority.

The bonds (Aa3/AA-/AA-) were sold on a competitive basis with Merrill Lynch winning the bid at a 4.942683% true interest cost. There were four bids received for the offering.

The bonds are due from 2018 to 2038 with coupons ranging from 4% to 5%. The yields range from 4.09% to 5.05%.

Proceeds will be used for capital projects and for refunding existing obligations.

Santa Clara school bonds price

The Santa Clara Unified School District in California priced $120 million general obligation bonds with a 4.7988% TIC on Wednesday, a source told Prospect News.

The series 2008 bonds (/AA/) priced with 3.5% to 5% coupons to yield 1.65% to 5%.

The bonds have serial maturities from 2009 through 2033.

Prager, Sealy & Co. was the winning bidder in the competitive sale.

The bonds were approved in a 2004 election. Proceeds will be used to renovate and expand school facilities.

Elsewhere on Wednesday, the Department of Airports of the City of Los Angeles had been expected to price $905.1 million in series 2008 revenue bonds, but calls to confirm the sale were not immediately returned.

Goldman, Sachs & Co. was the lead manager for the bonds, which included $618 million in series 2008A bonds (//AA), $8.3 million in series 2008B bonds (//AA), $250 million in series 2008C (//AA-) and $28.8 million in series 2008D bonds (//AA).

Proceeds will be used for interior improvements at Tom Bradley International Terminal, the South Airfield Improvement Program and for the refunding of the department's series 1995D and 2002A bonds.

Additional sales news

In other pricing news, the Connecticut State Revolving Fund planned to price $200 million general revenue bonds on Wednesday.

The series 2008A bonds (Aaa) were sold for wastewater treatment and public drinking water projects.

M.R. Beal & Co. was the senior manager of the negotiated sale.

The Los Angeles Unified School District in California was expected to price $500 million tax and revenue anticipation notes on Wednesday.

The series 2008/2009A notes are due July 30, 2009.

Banc of America Securities LLC was the senior manager of the negotiated sale.

Proceeds will be deposited in the district's general fund and invested in the Los Angeles County Treasurer's Pool.

The Pennsylvania State Turnpike Commission expected to price $234.84 million subordinate revenue bonds on Wednesday.

The $166.065 million subseries 2008B1 and $68.775 million subseries 2008B2 fixed-interest rate bonds were sold in a negotiated sale managed by Merrill Lynch & Co.

The bonds (A2) were sold to make a quarterly payment to the Pennsylvania Department of Transportation to fund grants to mass transit agencies and for road and bridge capital projects.

Calls to confirm the sales were not returned by press time.

Texas plans offerings

Several Texas issuers announced plans for upcoming sales, including the Lone Star College System, which plans to price $150 million G.O. bonds, according to a sale calendar.

The series 2008 limited tax bonds will be sold in a negotiated sale managed by Morgan Keegan & Co.

The Burleson Independent School District in Texas plans to price $82.6 million unlimited tax school building bonds in a competitive sale on July 31, according to a sale notice.

The series 2008 bonds have serial maturities from 2010 through 2024.

Southwest Securities is the district's financial adviser.

Proceeds will be used to construct, renovate and equip schools.

In other Texas-based sales, Waste Management Inc. expects to price $70.5 million revenue bonds through the Mission Economic Development Corp. the week of Aug. 1, according to a sale calendar.

The series 2008 solid waste disposal revenue bonds will be sold in a negotiated sale managed by Banc of America Securities LLC.

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