Dallas ISD to sell $400 million in school building bonds; activity to pick up after Thanksgiving

By Sheri Kasprzak

New York, Nov. 26 - As Americans hit the highways for their Thanksgiving destinations Wednesday, both new issue activity and secondary market action remained light with a few upcoming sales in the pipeline for after the holiday.

"The market is dead for the next two or three days," noted one sellsider, echoing another's sentiment from earlier in the week.

"Market conditions are really not that great right now, so I think a lot of issuers are basically waiting to see how things go after Thanksgiving."

An issuer earlier in the week indicated the same. Susan Reeves, president of Public Gas Partners in Georgia, said her company is playing the waiting game with its $226 million in bond sales. The offering is now on day-to-day status as the company monitors the market.

The highlight of the coming week comes from the Dallas Independent School District in Texas, which is set to bring $400 million in series 2008 unlimited tax school building bonds, according to a preliminary official statement.

The bonds will be sold on a negotiated basis with RBC Capital Markets as the senior manager.

The sale includes $9.54 million in premium capital appreciation bonds, which are due 2010, and $390.46 million in current interest bonds, which are due 2012 to 2034.

Proceeds will be used for constructing, renovating and equipping schools throughout the district.

Also in the market next week will be a $235.325 million sale of series 2008 revenue bonds from the Northwestern Memorial Hospital in Illinois.

The bonds (Aa2/AA+/) will be sold through senior manager J.P. Morgan Securities Inc.

The bonds are due from 2009 to 2018 with term bonds due 2023, 2028, 2033 and 2038.

Proceeds will be used for refunding existing bonds and making a termination payment related to interest-rate swap agreements.

Beaumont Hospital downsizes sale

In other health-care-related news, iffy market conditions have forced William Beaumont Hospital in Michigan to trim the size of its previously announced $583.72 million sale of series 2008V fixed-rate and series 2008W term-rate revenue and refunding bonds to $169.595 million, said a preliminary official statement released Wednesday. The bonds will be sold through the City of Royal Oak Hospital Finance Authority.

The sale was announced before September but has been delayed due to market conditions.

The bonds (A1/A/A) will be sold through lead manager Morgan Stanley.

Proceeds will be used for construction and renovation costs, refunding outstanding bonds and making termination payments made under interest-rate hedge agreements for the refunded bonds.

Austin to sell $160 million

Moving to other upcoming sales, the City of Austin, Texas, is expected to price $160 million in series 2008A water and wastewater revenue refunding bonds, said a preliminary official statement released Wednesday.

No official pricing date has been set for the sale, but the pricing could occur as early as Dec. 11, said Art Alfaro, the city's treasurer.

"We are taking this transaction before the city council to ask for approval on Dec. 11," Alfaro said in an interview Wednesday.

"We could possibly price on the 11th but will not know that until the week of Dec. 8. We will be asking council for parameters approval, which will give us the flexibility to price any time between Dec. 11 and June 11, 2009."

The bonds (Aa3/AA/AA-) will be sold on a negotiated basis with Merrill Lynch & Co. as the senior manager. The co-managers are Barclays Capital, Citigroup Global Markets, Morgan Stanley, Morgan Keegan & Co., Southwest Securities Inc., Apex Pryor Securities, Cabrera Capital Markets and Estrada Hinojosa & Co.

The bonds are due 2011 to 2028.

Proceeds will be used to refund $150 million in outstanding tax-exempt commercial paper notes.

Secondary light, unchanged

Moving to secondary market action ahead of the holiday, traders said activity was anything but spectacular.

"It's a typical day before a holiday," said one trader reached late Wednesday morning.

"It's not completely dead. There are a few things trading. Tone is relatively unchanged, but that's really to be expected."

In Wednesday's light trading action, WellSpan Health of Pennsylvania's series 2008A revenue bonds were seen in play with the 6% 2029s trading at par.

Also out of the health-care sector, Christus Health of Texas's series 2008A revenue refunding bonds were trading. The 5.75% 2018s were seen trading at par as well.

The Jewish Hospital and St. Mary's HealthCare of Kentucky's 6% 2022s were seen trading Wednesday at 6.055%.

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