King County prices $236.95 million bonds, yields from 2.03% to 4.72%

By Cristal Cody and Sheri Kasprzak

New York, Jan. 28 - King County in Washington came to market Monday with a $236.95 million in limited tax general obligation refunding bonds.

The series 2008 bonds (Aa1/AAA/AA+) priced in a serial structure from 2009 to 2034 with coupons ranging from 3.25% to 5.25%. The bonds have yields ranging from 2.03% to 4.72%, according to Nigel Lewis, senior debt analyst for the county in an interview with Prospect News.

Lewis said the bonds have a true interest cost of 4.43%.

"We achieved our savings target for the refunding," he said.

The county plans to use the proceeds to refund the series 1998 B outstanding general obligation bonds.

The lead underwriter is Goldman, Sachs & Co., with Citigroup Global Market, Lehman Brothers, Siebert Brandford Shank & Co. and Wachovia Bank listed as co-managers.

Since October, King County has reduced asset-backed commercial paper to about 5% of assets in its government investment pool. The bonds received a rating of AA+ on negative watch from Fitch earlier this month because of the county's potential for losses from asset-backed commercial paper.

Albany County bonds set to price

Elsewhere, the Albany County Airport Authority was set to price $83.435 million in series 2008A variable-rate refunding airport revenue bonds, but it could not be confirmed by press time Monday that the bonds had actually priced.

J. Dwight Hadley, chief financial officer for the airport authority, told Prospect News in a recent interview that the authority was testing the market because of recession fears. Hadley did not respond to calls requesting the terms of the bonds by press time Monday.

The bonds have a floating rate to be reset weekly, Hadley noted in the recent interview, and will price in a serial structure from 2008 through 2023.

Depfa First Albany Securities LLC is the financial advisor for the competitive offering.

Proceeds will be used to help refund the authority's outstanding series 1997 bonds in February and fund a debt service reserve.

Florida school board to price certificates

Looking ahead, the Orange County School Board in Florida expects to price $86.58 million refunding certificates of participation about Feb. 20, the issuer reported Monday.

The series 2008A variable-rate certificates received an A1 underlying rating from Moody's Investors Service. The rating applies to $1.46 billion of outstanding parity certificates, including the current sale for the Florida-based district.

Proceeds will refund $80.4 million of the district's series 2002A certificates, said Steven Compton, senior administrator for the board's treasury service.

"Being the financial markets the way they are today, the rates have come down from those, so we will refund a portion of the 2002 series for a cost savings," Compton said.

The lead underwriter is Citigroup.

The variable rate paid for the certificates may be based on a percentage of Libor, the district's first exposure to basis risk but still a minimal 7.1% of the total certificates of participation portfolio, according to a Moody's release.

Las Vegas Water bonds to price

Looking to Tuesday, the Las Vegas Valley Water District plans to price $365.38 million in series 2008A general obligation bonds and refunding bonds and series 2008B refunding bonds (Aa1).

The offering includes $192.595 million in the 2008A bonds with a serial structure from 2009 through 2038 and $172.785 million in the series 2008B refunding bonds with a serial structure from 2009 through 2026.

Proceeds will refund a 1998 issue of bonds.

NSB Public Finance, Public Financial Management and Hobbs, Ong and Associates are the financial advisors.

Another sizable offering is coming from Wisconsin in the form of $135 million in clean-water fixed-rate bonds (Aa1/AA+).

The state intends to price $100 million in series 1 bonds and $35 million in series 2 bonds through lead manager Morgan Stanley in a negotiated offering.

The series 1 bonds will have a serial structure from 2009 to 2028 and the series 2 bonds from 2016 to 2019.

Proceeds from the deal will be used for wastewater treatment facilities and the refunding outstanding bonds.

Santa Clara County Financing Authority in California will price $124.95 million in series 2008A lease revenue bonds Tuesday.

The bonds (Aa3/AA) will be sold in a serial structure from 2008 to 2022.

Banc of America Securities is the lead manager with Citigroup Global Markets and Lehman Brothers as the co-managers.

Proceeds will be used to refund the county's series 2007A bonds.

The Alaska Housing Finance Corp. rounds out Tuesday's calendar with $80.88 million in series 2008A home mortgage revenue bonds set to price on a negotiated basis through lead manager Citigroup.

Bear, Stearns & Co. Inc., Goldman, Sachs & Co., JPMorgan, Merrill Lynch, Siebert Brandford Shank & Co. and Wachovia Securities are the co-managers.

The bonds (Aa2/AA/AA+) have a serial structure from 2009 to 2018 with term bonds due 2023, 2028, 2033 and 2038.

Proceeds will be used for the purchase of qualified mortgage loans for first-time homebuyers in Alaska.

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