Auction-rate conversions continue; Triborough Bridge and Tunnel Authority prices $1 billion in bonds

By Cristal Cody and Sheri Kasprzak

New York, March 12 - In the ongoing fallout from the auction-rate crisis, municipals issuers continued to announce plans to convert their securities.

Among the conversions announced Wednesday was Grand Rapids, Mich., which said it will convert $32.9 million in its remaining series 1993 variable-rate demand revenue refunding bonds on April 3.

The multi-modal water supply system improvement bonds currently reset weekly. The bonds will be converted to a fixed rate, the city's chief financial officer Scott Buhrer said Wednesday.

The city was planning to choose a remarketing agent on Tuesday, he said.

Also on Wednesday, the District of Columbia said it will convert $115.325 million Georgetown University bonds from an auction-rate to a term-rate mode on April 1, according to a notice released Wednesday.

The university will remarket $57.875 million in series 2007B revenue bonds and $57.45 million series 2007C bonds.

The District of Columbia also intends to convert $150 million in hospital revenue auction-rate bonds sold for the Children's Hospital and Children's Hospital Foundation.

The securities will convert to a long-term rate.

Series 2005-1 bonds will be converted on April 9. Series 2005-2 bonds will be converted on April 10, and series 2005-3 bonds will be converted on April 11, according to a preliminary reoffering circular released Tuesday.

The bonds (/AAA/AAA) mature July 15, 2035.

UBS Investment Bank is the remarketing agent.

The Massachusetts Health and Educational Facilities Authority was expected to convert $71 million series D-1 bonds for the Partners HealthCare System on Wednesday.

The D-1 bonds were issued as auction rate and were planned to convert to a daily rate.

Series D-2 bonds of $79 million converted March 5 to a weekly rate.

The bonds are due July 1, 2035.

JPMorgan is the remarketing agent for series D-1 bonds.

Triborough Bridge sells $1 billion

Moving to an active day of pricings, the Triborough Bridge and Tunnel Authority priced $1 billion in general revenue bonds, an upsized deal from the originally planned $750 million offering, a source at the issuer confirmed.

The information provided on the bonds was tentative, as the pricing was still ongoing Wednesday afternoon.

The 2023 maturity has a 4.5% coupon and a 4.6% yield. The 2028 maturity has a 4.875% coupon and a 4.95% yield and the 2033 maturity has a 5% coupon and a 5.09% yield. Pricing information on the serials was not immediately available.

The bonds (Aa2//AA-) have a serial component due from 2009 to 2029. That information will be available later this week, the source noted.

The bonds were sold on a negotiated basis with Lehman Brothers, UBS Investment Bank and Goldman, Sachs & Co. as the lead managers. The proceeds will be used for bridge and tunnel projects, as well as commuter and transit projects.

Port Authority prices bonds

In another sizable deal priced Wednesday, the Port Authority of New York and New Jersey priced $691.355 million consolidated bonds (Aa3/AA-/AA-) with 5.85% and 5.76% true interest costs in competitive sales Wednesday.

The authority priced $343.289 million series 150 bonds due from 2013 to 2027 and $348.066 million series 151 bonds due 2019 to 2035, the issuer confirmed in a statement.

Series 150 bonds priced with a 5.852% true interest cost, the lowest of four bids received, the authority said. Lehman Brothers was the successful bidder.

The bonds priced 4.125% to 6.4% annual interest rates.

Series 151 bonds were awarded to Goldman, Sachs & Co. on a 5.762% true interest cost, the lower of two bids received. The bonds priced with interest rates from 5.25% to 6% a year.

Proceeds from the deal will be used to refund series 7 and series 8 versatile structure obligations and series A commercial paper notes. All auction-rate securities will be refunded by May 1, Port Authority chairman Anthony R. Coscia said in a statement Wednesday.

Wayne State prices with 5.68% TIC

Wayne State University in Michigan priced $180.69 million general revenue bonds with a 5.68% true interest cost, the underwriter said Wednesday.

The series 2008 bonds (Aa3/AA-/) priced Tuesday with 5% to 5.25% coupons to yield 2.22% to 5.07%, said Richard Bellis, vice president of Goldman, Sachs & Co., the senior underwriter of the sale.

"It was a challenging market yesterday, but the bonds were well received due to a strong double A credit in the state of Michigan," Bellis said in an interview.

The FSA-insured bonds have serial maturities from Nov. 15, 2008, through Nov. 15, 2035.

Lehman Brothers, Loop Capital Markets and JPMorgan are co-managers.

Proceeds will be used to refund previously issued debt and finance the cost of swap termination payments.

North Dakota Housing resets pricing date

North Dakota Housing Finance Agency plans to price $56.565 million housing finance bonds on Thursday, the issuer said in an interview.

Series 2008 C home mortgage finance program bonds (Aa1/VMIG 1) are short-term bonds that mature June 1, 2009.

The bonds were expected to price Wednesday, but the agency rescheduled the date because of market conditions, said Pat Nagel, the agency's chief financial officer.

"A lot of those auction-rate securities are being moved into one-year notes, so there's a lot of paper out there," Nagel said.

"Our underwriters made the comment of something like $170 billion. Because of the amount of paper out there today, we're going to just hold back one day."

Citigroup Global Markets is the underwriter of the negotiated sale.

Proceeds will be invested in a guaranteed interest account.

Maryland Transportation prices bonds

Elsewhere, the Maryland Transportation Authority had been expected to price $685 million in series 2008 transportation facilities projects revenue bonds on Wednesday.

The pricing could not be confirmed with the issuer by press time.

The bonds (Aa3) were sold on a competitive basis and the proceeds will be used to finance highway projects.

Also set to price Wednesday was $310.12 million in lease revenue bonds from the State Public Works Board of the State of California. The pricing terms could not be confirmed Wednesday, but the bonds (A1) apparently include $269.305 million in series 2008A bonds, $26.275 million in series 2008B bonds and $14.54 million in series 2008C bonds.

The 2008A bonds are due 2009 to 2028 with a term bond, the 2008B bonds are due 2009 to 2028 with a term bond and the 2008C bonds are due 2009 to 2023 with a term bond.

Proceeds from the sale will be used to construct a replacement for the University of California Irvine Medical Center, to fund seismic improvements to University of California San Francisco Moffitt and Long Hospital and to expand the Natural Sciences Unit 2 at McGaugh Hall.

Bear, Stearns & Co. and Cabrera Capital Markets were the lead managers for the negotiated sale.

New Hampshire was expected to price $89.715 million general obligation bonds in a competitive sale Wednesday.

Series 2008A bonds are due from 2019 to 2025 and series 2008B bonds are due from 2009 to 2028.

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

Additional information was not available.

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