DALLAS — A few larger sales by Houston-area issuers are set to price this week in the state municipal market, while a North Texas community college continues its expansion plans with a $220 million sale.

The Harris County Cultural Education Facilities Finance Corp. plans to issue $150 million of Series 2008B fixed-rate revenue refunding bonds on behalf of the Methodist Hospital of Houston. Another $650 million of variable-rate revenue refunding bonds is also set to come to market, but the exact timing of that sale is dependent upon market conditions.

JPMorgan is sole underwriter for this week’s negotiated sale.

Standard & Poor’s assigned a AA rating to the Series 2008B bonds due to the hospital’s “sound business profile as an academic medical center that has evolved into a regional system with four well-placed facilities in the growing metropolitan Houston market.”

Harris County is coming to market with $330 million of permanent improvement refunding bonds in three series through a negotiated sales led by Loop Capital.

First Southwest Co. is the financial adviser to the county, which includes Houston and is one of the fastest-growth areas of the country, adding about half a million new residents this decade.

Lone Star College System will offer $150 million of limited tax general obligation bonds Wednesday on the heels of an upgrade from Standard & Poor’s to AA-plus from AA. The upgrade also applies to $173 million of GO bonds. Moody’s Investors Service rates the college at Aa2.

This sale is the first slice of a $420 million authorization approved by voters in May and is the first under the new name for the community college that was established in 1973. The district changed its name in January from North Harris Montgomery Community College District.

Officials expect to issue the remaining authorized bonds with three more sales by 2011.

Morgan Keegan & Co. Inc. lead the underwriting syndicate, with First Southwest, Southwest Securities, Siebert Brandford Shank & Co., and Rice Financial Products Co.

Vinson & Elkins LLP is bond counsel. The district’s financial adviser is RBC Capital Markets.

Proceeds will fund construction and expansion of facilities at each of the district’s seven campuses, and purchase land for future campus sites needed to meet the demand of the area’s rapidly growing population.

The district serves the northern suburbs of Houston, including all of Montgomery County and portions of Harris, Liberty, and Waller counties. Total population is estimated at 1.5 million, up from less than 700,000 in 1998.

The Dallas County Community College District plans to issue $220 million of GO refunding and improvement bonds this week to take out some commercial paper notes and continue its expansion plans.

About half of the issue is a refunding and the bonds are structured as serials with final maturity in 2028. The district serves more than 64,000 students at seven campuses in North Texas.

Southwest Securities is lead manager for the negotiated sale..

First Southwest and Estrada Hinojosa & Co. Inc. are co-financial advisers to the district. McCall, Parkhurst & Horton LLP and West & Associates LLP are co-bond counsel.

Robert Estrada, chairman of Estrada Hinojosa, said the district expects to forego bond insurance due to its natural triple-A underlying ratings.

“We were looking at pricing the bonds on the 5th, but now plan to go out into the market Monday morning,” Estrada said. “We think investors will be beating down the door to get some triple-A paper, as it’s becoming less and less available in the market.” 

Moody’s assigned its Aaa rating to today’s sale and affirmed its Aa2 rating on the district’s revenue bonds. Analysts said the strong ratings reflect the district’s size, tax-base expansion, tuition adjustments, prudent management that’s led to a build-up of reserves for capital expenditures, and manageable debt burden.

Standard & Poor’s assigned a AAA rating to the sale, citing the district’s “very deep and diverse economic and property tax base, diverse revenue stream, coupled with significant revenue-raising flexibility, strong financial management and position, and moderate overall debt levels.”

Following this sale, the district will have $160 million of authorized but unissued debt remaining from a $450 million bond package passed in May 2004.

Vice chancellor for business affairs Ed DesPlas said the district has about 20 months remaining on its plan to construct new buildings on each campus and build new community centers to “act as a bridge to the college in some of the underserved areas of Dallas County.”

He said all the officials of the district have worked hard to maintain the triple-A ratings and he expects to be back in the market this time next year with $80 million and again in two years with the final tranche of the ’04 authorization.

Anna Independent School District plans to competitively offer just shy of $10 million of unlimited tax school building bonds Wednesday.

First Southwest is the financial adviser to the district, which has an enrollment of about 1,865 students in three schools about 45 miles north of downtown Dallas.

Moody’s assigned its Baa1 underlying rating to the sale.

Troy Independent School District will issue $16.9 million of school building bonds this week in a negotiated sale led by Edward D. Jones and RBC Capital Markets.

This sale exhausts the entire authorization approved by district voters in May for renovations to existing facilities and a new middle school.

First Southwest is the financial adviser to the Central Texas district, which has an enrollment of about 1,280 students at four campuses.

Standard & Poor’s assigned an A-plus underlying rating to the issue, citing the district’s strong financial performance, strong reserves, substantial state support for operations, and good wealth and income indicators.

Both districts expect to receive the triple-A credit enhancement of the state Permanent School Fund for their bonds.



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