Energy Northwest brings $370.55 million; Tennessee school bond authority sells $113.58 million

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, March 31 - A fairly big day for primary municipal market activity was led Tuesday by Energy Northwest in Washington State.

In the secondary market, a trader said the tone firmed in a session with light trading.

"We're really not seeing too much going on today," she said.

Energy Northwest sold $370.55 million in series 2009 revenue refunding bonds at a true interest cost of 4.104%, according to spokeswoman Rochelle Olson.

Citigroup Global Markets Inc. and Goldman, Sachs & Co. acted as lead underwriters for the negotiated deal, which has its final maturity in 2024.

Proceeds will be used for system maintenance.

Energy Northwest has headquarters in Richland, Wash.

Tennessee school bonds

The Tennessee State School Bond Authority priced $113.581 million in series 2009A higher education facilities second program bonds, said Mary-Margaret Collier, the Tennessee State Treasurer's director of bond finance.

The bonds (Aa2/AA/AA) were sold through lead manager J.P. Morgan Securities Inc.

The bonds are due 2010 to 2029 with term bonds due 2034 and 2039. The serials have coupons from 2% to 5% with yields from 0.75% to 4.89%. The 2034 bonds have a 5% coupon to yield 5.05%. The 2039 bonds have a 5% coupon to yield 5.08%.

The authority elected not to sell its planned $19.46 million in series 2009B refunding bonds.

Proceeds will be used to retire outstanding debt and construct new university facilities.

In other pricing news from Tuesday, the University of Connecticut priced $150 million in series 2009A general obligation bonds, said Karen Grava, spokeswoman for the university. She noted that the pricing terms were still being determined late Tuesday afternoon.

J.P. Morgan Securities was the lead manager for the sale.

The bonds are due 2010 to 2029.

Proceeds will be used for capital expenses.

The university is located in Storrs, Conn.

New Jersey bonds

Elsewhere, the New Jersey Educational Facilities Authority plans to price approximately $253 million in series 2009B revenue refunding bonds for the University of Medicine and Dentistry of New Jersey on Wednesday, according to executive director Roger Anderson.

The authority is unsure of what sort of yields to expect, Anderson said, because of the unique nature of the deal.

"We're going to have true price discovery," he said.

Hospital deals have been less common in recent sessions, he said, but what sets the deal apart is a sort of escrow account to ensure payment.

New Jersey will establish a "lock box" account and place unrestricted funds intended for the university in the account, Anderson said.

The bank will reconcile the debt services while any excess is given to the university, he said.

The program should "improve marketability," he said.

Morgan Stanley & Co. Inc. and Citigroup Global Markets will act as co-leads for the bonds, which have serial maturities from 2012 to 2018 and term bonds due 2023, 2028 and 2032.

The university is located in Newark, N.J.

PPL Energy ahead

Moving to upcoming sales, the Pennsylvania Economic Development Authority is set to sell $230.57 million in series 2009 exempt facilities revenue refunding bonds for PPL Energy Supply LLC, said a preliminary official statement released Tuesday.

The sale includes $100 million in series 2009A bonds, $50 million in series 2009B bonds and $80.57 million in series 2009C bonds.

The 2009A and 2009B bonds are due Dec. 1, 2038, and the 2009C bonds are due Dec. 1, 2037.

Goldman Sachs, Morgan Stanley and KeyBanc Capital Markets LLC are the underwriters for the negotiated deal.

Proceeds will be used to install pollution-control facilities and to refund the authority's series 2007 revenue bonds.

PPL Energy is based in Allentown, Pa.

Detroit coming up

In other upcoming sales, the City of Detroit plans to price $128.48 million in series 2009 revenue anticipation notes, said a preliminary official statement.

Pricing is expected for April.

The notes (/SP-1+/) will be sold on a negotiated basis with Morgan Stanley and Loop Capital Markets LLC as the senior managers.

The notes are due March 1, 2010.

Proceeds will be used to pay for operating expenses for the fiscal year ending June 30.

Kern County sale

Also ahead this month, the County of Kern in California is gearing up to sell $93.465 million in series 2009A certificates of participation, said a preliminary official statement.

The COPs are expected to price the week of April 6, but no exact pricing date has been set, said a sellside source connected to the sale.

The COPs (A3/A+/) will be sold through senior manager J.P. Morgan Securities.

The COPs are due 2011 to 2029 with a term certificate due 2035.

Proceeds will be used to pay for transportation projects and to supplement the county's income following state budget cuts.

The county seat is Bakersfield, Calif.

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