Issuers eye Lehman bankruptcy news; Port of Seattle delays sale of $379.72 million revenue bonds

By Cristal Cody and Sheri Kasprzak

New York, Sept. 15 - The impact of a major shake-up at Lehman Brothers was not immediately felt in the municipals world Monday, but some issuers may be affected by the banking powerhouse's bankruptcy filing.

Lehman is the underwriter for Port of Seattle's $379.72 million revenue bonds (A2/A-/), and the issuer told Prospect News Monday that the pricing has been pushed back to late October or early November. The offering was first announced in June.

Port watches proceedings

The port is watching the developments with Lehman Brothers' Chapter 11 bankruptcy filing before it makes a decision on choosing a new senior manager, said Dan Thomas, chief financial officer.

"We're watching the developments very closely at present," he said. "Lehman Brothers is still our underwriter but we'll be watching how things unfold over the next few days."

The sale includes $19.415 million series 2008A current interest bonds, $286.775 million series 2008B-1 current interest taxable bonds and $73.526 million series 2008B-2 taxable capital appreciation bonds.

The series 2008A bonds are due Dec. 1, 2023.

The series 2008B-1 bonds have serial maturities from 2011 through 2021 and a term due 2027.

The series 2008B-2 bonds have serial maturities from 2027 through 2040.

Proceeds will be used to pay a portion of the development costs for a consolidated rental car facility and a bus maintenance facility.

New offerings abound

Despite the doldrums on Wall Street, new offerings flooded the muni market on Monday. Thursday in particular is gearing up to be a day packed with new issues, led by a $583.72 million sale of revenue and refunding bonds from the Royal Oak Hospital Finance Authority of Michigan.

The sale includes series 2008V fixed-rate and series 2008W term-rate revenue and refunding bonds, according to a calendar of upcoming offerings.

The bonds (A1/A/A+) will be sold through senior manager Morgan Stanley. The bonds are being issued for the William Beaumont Hospital.

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

Athens-Clarke bonds price

Also coming up on Thursday, the Unified Government of Athens-Clarke County in Georgia plans to sell its previously announced $220.02 million in series 2008 water and sewerage revenue bonds, according to a sales calendar.

The bonds (Aa3/AA-/AA) will be sold through senior manager Citigroup Global Markets.

The bonds are due 2009 to 2028 with term bonds due 2033 and 2038.

Proceeds will be used to refund the government's series 1997 revenue bonds and to pay for renovations and additions to the water and sewerage system.

U of Colorado's revenue bonds

Yet another deal set for pricing on Thursday is a $142.6 million sale of series 2008 enterprise system revenue bonds from the University of Colorado, according to a calendar of sales.

The bonds (Aa3/AA-/) will be sold on a negotiated basis with Stifel Nicolaus as the senior manager.

Proceeds will be used for campus projects, including the renovation of residence halls, construction of a Center for Community on the Boulder campus, a visual arts building, a science and engineering academic building, as well as the reimbursement to the university for the purchase of a new building in Denver for the UC Denver School of Business.

Additionally, the Boston Water and Sewer Commission plans to sell $115.105 million in series 2008 revenue bonds on Thursday.

The bonds will be sold competitively and are due from 2009 to 2031.

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

L.A. Convention bonds

In other pricing news for the week, the Los Angeles Convention and Exhibition Center is expected to price its previously announced $250 million in series 2008A lease revenue refunding bonds on Tuesday, according to a sales calendar.

The bonds (A1/AA-/AA-) will be sold through Merrill Lynch.

Proceeds will be used to refund the center's outstanding series 2003B1, 2003B2, 2003C1, 2003C2, 2003D, 2003E and 2003F lease revenue refunding bonds.

Also on Tuesday, Pasco County, Fla., is set to sell $185 million in series 2008 water and sewer revenue bonds, said a calendar of sales.

The bonds (Aa3/AA/AA-) will be sold on a negotiated basis with Morgan Keegan & Co. as the senior manager.

The bonds are due 2010 to 2023 with term bonds due 2028 and 2038.

Proceeds will be used to finance county projects.

Kansas Development sale ahead

On Wednesday, the Kansas Development Finance Authority plans to price $112.575 million in series 2008DW Kansas water supply revolving loan fund revenue bonds, said a preliminary official statement.

The bonds (/AAA/AAA) will be sold on a negotiated basis with Citigroup Global Markets as the senior manager.

The bonds are due from 2009 to 2029.

Proceeds will be deposited to the state's loan fund and will later be disbursed to local governments.

Wake County, N.C., to price $524.365 million

Moving to later in the month, Wake County of North Carolina intends to price $524.365 million bonds through competitive and private sales, according to a preliminary official statement and notices of sale.

The county will offer $424.365 million general obligation bonds through competitive sales on Sept. 23.

The $354.5 million series 2008A G.O. public improvement bonds have serial maturities from 2016 through 2026.

The $69.865 million series 2008B G.O. refunding bonds have serial maturities from 2010 through 2015.

The county also plans to price $100 million in series 2008C and 2008D variable-rate school bonds through a private sale.

Waters and Co. is the county's financial adviser.

Proceeds will be used to refund the $71 million outstanding from the series 1998 public improvement bonds and to finance the acquisition, construction, expansion and renovation of library, school and community college facilities and other county improvement projects.

Fairfax County Redevelopment BANs

Also coming up on Sept. 23 is a $105.51 million sale of bond anticipation notes from the Fairfax County Redevelopment and Housing Authority in Virginia, according to a notice of sale.

The series 2008B notes (MIG1/SP-1+/) are due Nov. 3, 2009.

Public Financial Management is the county's financial adviser.

Proceeds will be used to refund the $105.485 million outstanding from the series 2007B bond anticipation notes that mature on Oct. 9, 2008.

Looking ahead to other deals, the Kentucky State Property and Buildings Commission intends to price $398.505 million bonds on Oct. 8, according to a sale calendar.

The sale includes $375 million series 90, $18.5 million series 91 and $5.005 million taxable series 92 bonds.

Morgan Stanley is the senior manager of the negotiated sale.

Chicago deal to price

Later this week, the city of Chicago is expected to sell $190 million in second-lien wastewater transmission revenue and refunding bonds, said a calendar of sales. A sellside source said no exact pricing date has been set and the issuer is feeling out the market at this time.

The bonds will be sold through lead manager Cabrera Capital Markets.

The sale includes $160 million in series 2008A bonds and $30 million in series 2008B revenue refunding bonds.

Proceeds will be used to finance improvements and extensions to the wastewater transmission system and to refund the city's outstanding series 1998A and 1998B revenue bonds.

Colorado Health sale ahead

The Colorado Health Facilities Authority is scheduled to price its previously announced $140.245 million in series 2008 retirement community revenue bonds later this week, said a calendar of upcoming deals.

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

The bonds are due 2018 and 2043.

Proceeds will be used for the construction of Eagle's Trace retirement community, as well as for a deposit to a debt service reserve fund.

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