Redemptions and conversions continue unabated; Thursday hosts enormous slate of deals

By Cristal Cody and Sheri Kasprzak

New York, March 13 - Redemptions and conversions continued to dominate municipals news on Thursday, with several issuers announcing redemptions.

Among them was San Bernardino, Calif., which plans to redeem $119.825 million in auction-rate securities due 2023. The redemption will take place April 17, a notice announced.

The county will redeem $89.825 million in 2004B-1 pension obligation bonds and $30 million in 2004B-3 auction-rate pension obligation bonds.

The California Academy of Sciences also announced Thursday that it plans to refund or convert its auction-rate revenue bonds, which were priced through the California Infrastructure and Economic Development Bank.

The academy said it plans to make the changes by July 1, but the refunding or conversion is dependent upon market conditions.

JPMorgan Securities is the remarketing agent.

In related news, the County of Los Angeles Treasurer and Tax Collector's office intends to purchase $84.4 million auction-rate bonds issued by the Los Angeles County Museum of Natural History Foundation.

The treasurer plans to bid beginning March 20 on the bonds at a reinvestment rate plus 1.5%.

The bids are for $42.2 million each in series 2007A and 2007B bonds due 2037, according to a notice released Wednesday. The bonds were priced through the California Infrastructure and Economic Development Bank.

Thursday's flurry of pricings

Thursday saw a frenzy of pricings as issuers tried to take advantage of better market conditions.

Heading up the sales, the Sweetwater Union High School District out of Chula Vista, Calif. priced $180 million in series 2008A general obligation bonds at a 5.2654746% true interest cost, the financial advisor told Prospect News Thursday.

The serial bonds (A2/A+/) due from 2008 to 2029 have coupons from 3% to 5.5% and yields from 2% to 5.12%. The offering also included term bonds due 2032, 2038 and 2047.

The bonds were sold on a negotiated basis through lead manager UBS Securities.

Proceeds will be used construct, repair, acquire and furnish school facilities.

Another school district - the Frisco Independent School District in Texas - priced $90 million in unlimited tax school building bonds Thursday, Richard Wilkinson, assistant superintendent of facilities and finance for the district, said.

The bonds (Aaa/AAA/) priced with a true interest cost of 4.9426%. Morgan Stanley was the winner of the competitive bid.

The bonds have a serial structure from 2010 to 2020, a term bond due 2022, serial bonds due 2024 to 2028 and term bonds due 2031, 2034, 2037 and 2040.

The coupons on the 2010 to 2020 bonds range from 4.125% to 5.25% with yields from 2.4% to 4.24%. The coupon for the 2022 bond is 5.5% with a yield of 4.3%. The coupons for the 2024 to 2028 bonds range from 4.75% to 5.5% with yields from 4.5% to 4.95%. The coupon for the 2031 bond is 5% priced at par, the coupon for the 2034 bond is 5% priced at par and the coupon for the 2037 bond is 5%, also priced at par. The coupon on the 2040 bond is 4.75% with a 5.1% yield.

Proceeds will be used to construct, equip and renovate school buildings.

Pennsylvania prices $101.335 million

In other education-related pricing news, the Pennsylvania State System of Higher Education priced $101.335 million bonds with a 3.97% true interest cost on Thursday, the system's financial advisor told Prospect News.

The series AG refunding revenue bonds (Aa3//AA-) priced with 3.25% to 5.25% coupons to yield 2.1% to 4.7%, said Michael Baird, director of RBC Capital Markets in Baltimore.

"It was a refunding, so they got the savings they needed," he said. "The market itself was a little up and down. The interest rates went down on the short end but were up on the longer end."

The bonds have serial maturities from June 15, 2008, through June 15, 2024.

Robert W. Baird & Co. won the bidding in the competitive sale, said Baird, who has no relation to the company.

The Pennsylvania Higher Educational Facilities Authority priced the bonds on the state system's behalf.

The North Dakota Housing Finance Agency also priced $56.275 million housing finance bonds on Thursday, the issuer told Prospect News.

Series 2008 C home mortgage finance program bonds (Aa1/VMIG 1) priced with a premium 3% coupon to yield 2.5%, said Pat Nagel, the agency's chief financial officer.

The short-term notes mature April 1, 2009.

"The price we got for the notes came in better than we anticipated," he said. "It was anticipated we may have some slight negative arbitrage on it, but it panned out well so we're in the black."

Citigroup Global Markets is the underwriter of the negotiated sale.

The notes were sold to preserve the agency's bond volume cap, he said. Proceeds will be invested in a guaranteed interest account.

New Hampshire prices

New Hampshire priced $86.3 million general obligation bonds (-/-/AA) with a 4.258% true interest cost, the issuer said Thursday.

Merrill Lynch was the successful bidder, out of eight underwriters, in the competitive sale, said Rachel Miller, chief deputy state treasurer for New Hampshire.

"It was a good day for us," she said. "We considered it a successful sale, with the average interest rate of 4.25%."

The series 2008A general obligation refunding bonds, due from 2016 to 2025, priced Wednesday with 5% coupons to yield 3.5% to 4.63%.

Series 2008B general obligation capital improvement bonds, due from 2009 to 2028, priced with coupons from 4% to 4.75% to yield 2.15% to 4.88%.

Proceeds from the 2008A bonds will be used to refund outstanding series 2004A and 2004B general obligation bonds, and series 2008B bonds will be used to pay for various capital improvements.

Idaho Housing Finance Authority trust bonds

The Idaho Housing Finance Authority priced $173.035 million grant and revenue anticipation federal highway trust bonds with a 4.73% true interest cost, a sell-side source said Thursday.

The series 2008A bonds (Aa3/-/A+) priced Tuesday with 2.6% to 5.25% coupons to yield 2.55% to 4.92%.

The bonds have serial maturities from 2008 through 2026.

Assurance Guaranty insured the bonds, except for maturities 2009 and 2010, a source said.

The bonds were sold on behalf of the Idaho Transportation Department.

Citigroup was the senior underwriter.

Proceeds will provide funding for six highway projects. The bonds are the second issue in the state's Garvee program, which will sell nearly $1 billion bonds to cover road projects.

Upcoming sales

Moving to upcoming deals, the Mississippi Business Finance Corp. plans to price $77.24 million variable-rate demand revenue bonds on Monday, a source reported Thursday.

The series 2008 bonds for Renaissance at Colony Park received an A1/VMIG 1 rating on Thursday from Moody's Investors Service.

Morgan Keegan & Co. is the underwriter.

Also coming up, the Grand Valley State University Board of Trustees plan to price $103.68 million general revenue refunding bonds, according to a preliminary official statement released Wednesday.

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

The bonds have serial maturities from Dec. 1, 2008, through Dec. 1, 2023, with term bonds due 2028 and 2033.

NatCity Investments Inc. is the underwriter.

Proceeds will be used on April 1 to refund the outstanding principal of series 2001B bonds, 2002 bonds, 2003 bonds, 2004 bonds and 2007 bonds.

Energy Northwest to price with seven tranches

Energy Northwest in Washington plans to price $697.17 million refunding bonds on March 25, a source confirmed Thursday.

The bonds (Aaa/AA-/AA-) will be issued in seven tranches:

• $308.425 million series 2008-A project 1 electric revenue refunding bonds, due 2010 through 2017

• $241.325 million series 2008-A Columbia Generating Station electric revenue bonds, due 2010 to 2012 and 2014 to 2018

• $79.875 million series 2008-A project 3 electric revenue refunding bonds, due 2010, 2011, 2017 and 2018

• $5.65 million series 2008-B taxable project 1 electric revenue refunding bonds, due 2009 and 2010

• $20.515 million series 2008-B taxable Columbia Generating Station electric revenue and refunding bonds, due 2009, 2010 and 2021

• $3.205 million series 2008-B taxable project 3 electric revenue refunding bonds, due 2009 and 2010

• $38.175 million series 2008-C Columbia Generating Station electric revenue bonds, due 2021 through 2024.

Goldman, Sachs & Co. is the senior manager.

Proceeds will be used to refund prior lien bonds and electric revenue bonds and capital improvements at Columbia Generating Station, a nuclear power station.

Other bonds price Thursday

In other pricing news, the state of New York was expected to price $268.99 million in taxable and tax-exempt general obligation bonds (Aa3) on Thursday.

The offering included series 2008A bonds due 2009 to 2038 with a term bond and series 2008B bonds due 2009 to 2018 with a term bond.

The proceeds will be used for capital expenses related to accelerated capacity and transportation improvements made in the 1990s, clean air and clean water initiatives and transportation purposes.

The full terms of the deal were not immediately available.

Hennepin County in Minnesota was expected to price $60 million in series 2008A general obligation bonds (Aaa/AAA/AAA) on a competitive basis.

The terms were not available Thursday for the bonds, which are due from 2008 to 2027.

Proceeds will be used for capital improvements and library improvement projects.

Elsewhere, Clark County, Nev., was expected to price $200 million highway revenue commercial paper notes on March 13.

The series 2008A and series 2008B motor vehicle fuel tax notes (P-1) are expected to price March 13. The notes mature no later than 270 days after issuance.

Citigroup Global Markets is the underwriter of series 2008A, and UBS Securities LLC is the underwriter of series 2008B.

The sale could not be confirmed by press time.

Greater Orlando Aviation to price bonds

Looking ahead, the Greater Orlando Aviation Authority will price $350 million in airport facilities refunding revenue bonds competitively March 27, a source at the authority told Prospect News.

The bonds (Aa3//) include $310 million in series 2008A bonds and $40 million in series 2008B bonds.

Proceeds will be used to refund outstanding 1998 airport facilities refunding revenue bonds and to terminate payments for the associated swap.

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