SAN FRANCISCO - Issuers of recent bond offerings underwritten by Bear, Stearns& Co. - but yet to close - appeared to be resting easier yesterday after JPMorgan Chase& Co.'s fire-sale acquisition of Bear over the weekend.

The purchase, backed by "special financing" from the U.S. Federal Reserve, came in the face of Bear's almost certain collapse.

"We expect JPMorgan to pony up $1 billion on the 19th," Tom Dresslar, spokesman for California Treasurer Bill Lockyer, said yesterday, referring to a California Department of Water Resources power revenue bond deal that priced Thursday, in which Bear ran the books for a 17-member syndicate.

Bear was also senior underwriter for a recent $302.5 million State Public Works Board transaction, and Dresslar said the State Treasurer's Office expects it to close on schedule March 26.

"We received verbal assurances today from JPMorgan officials that they will honor Bear's commitments under the DWR and Public Works Board deals," Lockyer said in a statement released yesterday afternoon. "And JPMorgan said in a press release about the transaction that they will guarantee all of Bear's 'trading obligations.' With these assurances, and the Federal Reserve's backing of the acquisition, we are confident JPMorgan will honor Bear's commitments."

The treasurer's office is looking at whether or not it should strengthen its monitoring of bond underwriters, Lockyer's statement said.

"And to provide even greater assurance that underwriters will pay the state proceeds from bond sales, we are exploring the possibility of adding provisions to our transaction contracts that would beef up already-strong protections against non-performance by underwriters," he said.

Also last Thursday, Bear was the sole underwriter for a $49 million Nevada Housing Division issuance of single-family mortgage revenue bonds.

Lon DeWeese, the chief financial officer for the housing division, said yesterday that the intervention by JPMorgan and the Fed has eased any concerns about the transaction, slated to close April 3.

"I've examined both the merger agreement and guarantee agreement between JPMorgan Chase and Bear Stearns, and the guarantee being backed by the Federal Reserve's commitment," DeWeese said. "I feel pretty comfortable and have received assurances from both our investment banker and from others that this deal will close and that it will be a good transaction that will benefit the qualified borrowers of the state of Nevada."

It had been a difficult issue to assemble, he said, because of factors that include the general turbulence in the market.

"I was pleased in a tough market that we at least reached mid-market pricing," DeWeese said.

It was an important transaction for the housing division, according to DeWeese, because the division isn't structured to be a long-term holder of the mortgages it originates and depends on bond issuances to keep the financing pipeline from backing up.

Bear is slated to be a co-senior manager on Wisconsin's pending $960 billion restructuring of its pension-related issue of auction-rate securites that sold in a 2003 issue. The firm remains on the deal, according to capital finance director Frank Hoadley. "At this point, no one at Bear Stearns has told us that it's anything but business as usual there," he said.

The firm is also the senior manager on Wisconsin's looming refunding of its $1.6 billion 2002 tobacco bond issue, but that deal has long been on hold because of current market rates. Ahead of the ARS restructuring, Moody's Investors Service yesterday revised its outlook on Wisconsin's GO credit of Aa3 to negative from stable citing a looming budget deficit.

In 2007, Bear was the eighth-ranked senior manager in the tax-exempt market, involved in 138 issues worth a total of $24.8 billion, according to Thomson Financial data.

Over the past 10 years, Bear Stearns has served as financial adviser to eight issuers around the nation on deals totaling $3.2 billion, according to Thomson.

Most of that work was done for the Long Island Power Authority, which used Bear on seven deals totaling $2.52 billion. LIPA chief financial officer Elizabeth McCarthy declined to comment yesterday on what the sale of Bear means to the authority.

Bear was scheduled to serve as co-senior manager next week on a $240 million deal by Hackensack University Medical Center, using the New Jersey Health Care Facilities Financing Authority as a conduit issuer. Hospital officials did not respond to a request for comment yesterday.

Ted Phillips and Yvette Shields contributed to this story.

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