District of Columbia brings $400 million in TRANs with 1.09% initial rate; MEAG sells $350.35 million

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, Nov. 20 - Pricing action heated up in a big way Thursday, with billions in deals priced and loads of upcoming offerings announced in the pipeline.

The deal of the day came out of the District of Columbia, which brought $400 million in series 2008 general obligation tax and revenue anticipation notes to the table.

Meanwhile, down south, the Municipal Electric Authority of Georgia sold $350.345 million in series 2008 subordinated bonds.

The offerings are just two of several larger deals completed this week. The Commonwealth of Massachusetts and the City of New York were also in the market this week with deals worth well over $400 million.

"If you're a big issuer with a good credit rating, it's a good time to price," said one sellside source reached Thursday afternoon.

"For the smaller, A-rated issuers, maybe not. Investors are really looking for the safe bet right now."

District of Columbia chief financial officer Natwar Gandhi said in a statement Thursday that the district's "favorable credit standing on Wall Street" was a significant factor in the deal's low interest rate.

A similar offering completed last year priced with a 3.13% rate, according to the CFO's statement.

The notes (MIG 1/SP-1+/F1+) sold Thursday are due Sept. 30, 2009 and have a 1.09% initial rate.

Loop Capital Markets and Morgan Stanley were the lead managers for the negotiated offering.

Proceeds will be used for capital expenses ahead of the collection of some taxes and revenues.

"We are very pleased that, despite recent market disruptions, the notes priced at a very favorable interest rate and there was a very strong demand," Gandhi said in the statement.

MEAG sells $350.35 million

The Municipal Electric Authority of Georgia's $350.345 million in series 2008 subordinated bonds (//A+) priced Thursday, according to an official statement released by a sellside source.

The sale included $339.34 million in series 2008D Project One subordinated bonds and $11.005 million in series 2008C general resolution projects subordinated bonds.

The 2008D bonds are due from 2011 to 2026 with term bonds due 2023 and 2026. The serials have coupons from 4% to 5.75% and yields from 3.15% to 5.8%. The 2023 bonds have a 6% coupon to yield 5.6%, and the 2026 bonds have a 5.5% coupon to yield 5.8%.

The 2008C bonds are due 2019 and 2020 with coupons from 5.25% to 5.5% and yields from 5.12% to 5.33%.

The negotiated sale was made through lead manager J.P. Morgan Securities Inc.

Proceeds will be used to refund outstanding subordinated bonds, fund the acquisition of nuclear fuel and fund a debt service reserve fund.

Delaware Transportation prices bonds

Also priced Thursday was $117.875 million in series 2008B transportation system senior revenue bonds from the Delaware Transportation Authority.

The bonds (Aa3/AA+/) were priced on a competitive basis with Barclays Capital Inc. as the winning bidder. The true interest cost came to 4.722318%, said Robert King, spokesman for the Delaware Department of Transportation.

The bonds are due from 2010 to 2027 with a term bond due 2029. The coupons range from 4% to 5%, all priced at par. The 2029 bonds have a 5% coupon, priced at par.

Proceeds will be used for capital improvements and a deposit to a senior bond debt service reserve fund.

Massachusetts prices $544.29 million

On Wednesday, Massachusetts sold $544.29 million in series 2008A G.O. refunding bonds, according to an official statement released Thursday.

The bonds (Aa2/AA/AA) were sold through lead manager Citigroup Global Markets.

The bonds are due 2009 to 2025 with term bonds due 2028 and 2032. The serials have coupons from 3% to 5% with yields from 1.08% to 4.91%. The 2028 bonds have a 5% coupon to yield 5.07%, and the 2032 bonds have a 5% coupon to yield 5.25%.

Proceeds will be used for refunding the commonwealth's series 2007 bonds.

NYC sells $425 million G.O.s

Another large offering Wednesday came from New York. The city priced $425 million in series 2009F G.O. bonds, said Laura Rivera, spokeswoman for the city comptroller's office.

The sale included $400 million in series 2009F-1 tax-exempt bonds and $25 million in series 2009F-2 taxable bonds (Aa3/AA/AA-).

The 2009F-1 bonds are due from 2010 to 2031 with coupons from 2.6% to 5.7%, all priced at par. The series 2009F-2 bonds are due 2031 and have a 5.76% coupon, priced at par.

The negotiated sale was led by Merrill Lynch & Co. with Citigroup Global Markets, J.P. Morgan Securities and Morgan Stanley as co-senior managers.

Proceeds will be used for capital expenditures in the city.

Virginia Housing sale ahead

Moving to upcoming offerings, the Virginia Housing Development Authority plans to sell $300 million in series 2008 commonwealth mortgage bonds, said a preliminary official statement.

The sale includes $84.665 million in series 2008D AMT bonds and $215.335 million in series 2008E non-AMT bonds.

The bonds (Aaa/AAA/) will be sold through lead manager Merrill Lynch.

Proceeds from the sale will be used for financing mortgage loans throughout the commonwealth.

Looking to early next month, the Port Authority of New York and New Jersey is expected to price $300 million in series ZZ consolidated term notes on Dec. 3, said a preliminary official statement.

The notes are due Dec. 1, 2011 and will be sold on a competitive basis.

Proceeds from the sale will be used for capital expenses for a variety of projects from the port authority.

California Pollution Control bonds

In other upcoming sales, the California Pollution Control Financing Authority plans to price $100 million in series 2008A environmental improvement revenue bonds, said a preliminary official statement.

The bonds, which are due Dec. 1, 2046, will be sold on a negotiated basis with Goldman, Sachs & Co. as the senior manager.

Proceeds will be used for the construction of solid waste disposal facilities.

Secondary seen more active

Thursday's secondary market action was a bit livelier than the day prior, according to one trader reached in the afternoon.

"We're seeing lots of stuff moving today. It's really all across the board. We have seen a lot of stuff trading in the transportation sector today."

Moving to particular trades, the recently freed-to-trade series 2008 G.O. refunding bonds from the Commonwealth of Massachusetts saw some activity. The 3% 2012s were seen trading at 2.87%, and the 3% 2013s were trading at 3.06%. The 3.2% 2014s were seen trading at 3.23%. The 5% 2016s were trading at 3.62%.

In other recently freed-to-trade action, the Dormitory Authority of the State of New York's 2008 personal income tax revenue and refunding bonds were also seeing some secondary action on Thursday. The 3.5% 2015s were trading at 3.4%.

Also on Thursday, the Greater Orlando Aviation Authority's series 2008 refunding revenue bonds were seen in play. The 5.25% 2014s were seen trading at 5.757%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.