Connecticut brings $2 billion in G.O.s; New York City sells $525 million G.O. bonds at 3% to 4.72%

By Cristal Cody and Sheri Kasprzak

New York, April 15 - Tuesday marked a particularly active day for new issue pricings, led by a $2 billion general obligation bond sale from Connecticut.

In other pricing news, New York City sold $525 million in G.O.s on a negotiated basis.

Elsewhere, a trader said the tone of the muni market was a touch weaker in line with Treasuries.

"We're seeing a few things trading here and there," he said.

"Nothing particularly exciting. The market doesn't seem to know what it wants to do today. Looks like we're just following Treasuries at this point, off just a bit."

The market as a whole hasn't been the best, one issuer noted on Tuesday.

"The market hasn't been great for a number of weeks," Jo Ann Clark of the School Board of Brevard County, Fla., said in an interview with Prospect News Tuesday.

Brevard sold $50 million in revenue anticipation notes Tuesday.

"Considering the way things have been, we got a real good deal. This was an exceptional rate from the range of offers."

The issuer received six bids on it competitive sale. Six bids is a good indicator of strong demand, she said.

Moving back to the Connecticut new issue, Christine Palm with the state treasurer's office confirmed the offering priced, but the full terms were not immediately available.

The bonds (Aa3/AA/AA) were sold on a negotiated basis through lead managers Bear, Stearns & Co, JPMorgan and Merrill Lynch.

The sale includes $1.6 billion in series 2008A Teachers' Retirement Fund and current interest bonds due 2014 to 2028 with term bonds due 2032, and $400 million in series 2008B Teachers' Retirement Fund capital appreciation bonds due 2014 to 2025.

The state will use the proceeds to deposit to the Teachers' Retirement Fund.

Looking ahead, the state plans to price $400 million in general obligation bonds in May. No additional details are available on the upcoming G.O. sale at this time, the issuer said. Also in May, the state plans to remarket $100 million in state special tax obligation bonds.

New York City prices G.O.s

In other news, New York City brought $525 million in general obligation bonds Tuesday, the city confirmed to Prospect News.

The sale includes $475 million in tax-exempt fixed-rate bonds (Aa3//AA-) sold on a negotiated basis through lead manager Banc of America Securities. The co-managers for this sale were Bear, Stearns & Co.; Citigroup Global Markets; Merrill Lynch; and Morgan Stanley.

Carol Kostik, the city's deputy comptroller, did not immediately have the full terms, but noted that the yields for the 2012 to 2029 bonds ranged from 3% to 4.72%.

"We were very pleased with the sale, which drew strong interest from both retail buyers and a good range of institutional investors," Kostik said in a brief interview Tuesday.

The sale also included a $50 million offering of taxable general obligation bonds sold on a competitive basis. Goldman, Sachs & Co. was the winner of the bid with a 3.57% true interest cost.

Tuesday's bond sale is expected to settle on April 23.

Coming up, Kostik said, the city plans to sell $475 million in tax-exempt variable-rate demand bonds, which should price around April 22.

Brevard schools price $50 million

In other Tuesday pricings, the School Board of Brevard County, Fla., sold $50 million revenue anticipation notes with a 1.65% net interest cost in a competitive sale, the issuer told Prospect News.

Citigroup Global Markets was the successful bidder out of six bids, said Jo Ann Clark, director of accounting for the school district.

The series 2008 notes (MIG 1//) priced with a 2.75% coupon to yield 1.632%.

The notes are due April 24, 2009.

"We had six bids ranging from 1.65% net interest cost to 1.866%," Clark said.

The six bids is an indicator of great interest, Clark noted.

"Depending on the way the markets are, you may only get two or three bids. But this is good paper, and there is high demand for Brevard paper by many of the banks," she said.

Because of budget and tax issues, the school district doesn't anticipate any more bond sales this year.

"A lot of issuers in Florida are revamping their budget process," Clark noted, adding: "At this point, until we see how the tax rolls turns out" no more sales are planned.

Proceeds will be used to finance and refinance the costs of school improvements in the county.

"We have a lot of renovations going on in our schools for educational technology and to bring some of the science labs up to date," Clark said.

Virginia Building Authority bonds price

Also on Tuesday, the Virginia Public Building Authority entered the market Tuesday with $58.995 million public facilities revenue refunding bonds with a 2.538% true interest cost.

The series 2008A fixed-rate bonds (/AA+/AA+) priced with 5% coupons to yield 1.84% in 2009 to 2.76% in 2012, said Evelyn Whitley, director of debt manager for the state treasurer's office, which oversees the building authority.

"They were a bit better than expectations actually," she said of the terms.

The maturities were short since this is a refunding issue, she said.

Lehman Brothers won the bidding out of 11 bids in the competitive sale, Whitley said.

Proceeds will be used to refund the 2009 to 2013 maturities from the $60.775 million series 1998A public facilities revenue refunding bonds. The bonds will be redeemed on Aug. 1.

The authority also plans to price $138.21 million school authority bonds in a competitive sale on April 22 and $59.87 million five-year notes in a competitive sale on April 30.

Philadelphia bonds price Wednesday

Many issuers are entering the market on Wednesday, led by Philadelphia, which plans to price $203.8 million general obligation refunding bonds on Wednesday, a source told Prospect News.

The series 2008A bonds (Baa1) will be used to refund the city's series 2003B auction-rate bonds to convert them to fixed rate.

Clear Creek Independent School District in Galveston and Harris counties of Texas, plans to price $96.675 million unlimited tax school building and refunding bonds on Wednesday, a source told Prospect News.

The series 2008 bonds have serial maturities from 2009 through 2033.

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

Proceeds will be used to construct new schools, purchase building sites, upgrade technology and refund outstanding unlimited tax bonds.

Florida also expects to price $99.685 million Everglades restoration revenue refunding bonds in a competitive sale on Wednesday.

Florida prices bonds on 18 hours notice.

The Department of Environmental Protection series 2008A bonds (A1/AA-/A+) have maturities from July 1, 2008 through July 1, 2025.

Proceeds will be used to refinance the outstanding series 2006A and B multi-modal Everglades restoration revenue bonds and to fund a reserve account.

Looking ahead, the Community Unit School District No. 308 in Illinois plans to price $79.988 million general obligation capital appreciation school bonds on April 21, a source said Tuesday.

The series 2008 bonds (A1//) are insured by Financial Security Assurance.

The bonds mature from 2020 through 2028.

Raymond James is the underwriter of the negotiated sale.

Proceeds will be used for renovations and to build new schools in the district in Kendall, Kane and Will counties.

Wisconsin Power bringing $235 million

Wisconsin Public Power Inc. also intends to price $234.685 million power supply system revenue bonds, according to a preliminary official statement.

The series 2008A bonds (A1/A+/A+) will be sold in a negotiated sale directed by senior manager JPMorgan and co-manager Morgan Stanley & Co.

Proceeds will be used to refund a portion of the company's outstanding bonds, finance construction and improvements of the company's Boswell 4 generating unit, fund the debt reserve account for the series 2008A bonds and finance capitalized interest.

The issuer said, "as a result of the turmoil in the financial markets relating to the sub-prime mortgage crisis" it will issue the bonds to refund the refunded bonds with a long-term fixed rate.

The company plans to refund its variable-rate auction bonds that include $64.5 million series 2003B revenue bonds, $33.275 million series 2003C and $93.9 million series 2005B bonds.

Children's Healthcare bonds to price

In other pricing news, Children's Healthcare of Atlanta had been expected to price $200 million refunding revenue anticipation certificates and bonds on Tuesday.

The sale includes $110 million series 2008B and $40 million series 2008C refunding revenue anticipation certificates and $50 million series 2008B refunding revenue bonds, said hospital spokesman Patty Gregory.

The certificates were to price through the DeKalb Private Hospital Authority and the bonds were to price through the Development Authority of Fulton County.

The bonds and certificates (Aa2/AA/) are due July 1, 2039.

The bonds will bear interest at a weekly interest rate.

Citigroup Global Markets is the senior manager.

Proceeds will be used to refund the hospital's series 2005A and 2005B revenue anticipation certificates and series 2005B revenue bonds.

Dickinson Independent School District in Galveston County, Texas, also was expected to price $60 million series 2008 unlimited tax schoolhouse bonds (A3/A-/) in a negotiated sale led by Southwest Securities.

Proceeds will go to construction, acquisition and equipment of schools, the purchase of sites for school buildings and for the acquisition of new school buses; pricing April 15.

The Maine Municipal Bond Bank intended to price $51.975 million bonds on Tuesday.

A retail period for the $5.485 million series 2008A bonds and $43.59 million series 2008B bonds was expected to start Friday.

The series 2008A bonds have serial maturities from Nov. 1, 2008 through Nov. 1, 2019, and the series 2008B bonds have maturities from Nov. 1, 2009, through Nov. 1, 2028 with term bonds due 2031 and 2038.

UBS Investment Bank is the senior manager.

Proceeds will be used to purchase $50.409 million municipal bonds from 15 towns, cities, schools and water and sewer districts.

Calls to confirm the sales were not immediately returned.

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