Washington prices bonds with initial 3.5% coupon; Port of Tacoma prices $130 million in two series

By Cristal Cody and Sheri Kasprzak

New York, Jan. 8 - Competitive action picked up in the municipal market Tuesday with Washington State pricing two issues totaling $921.245 million.

One of the Washington bonds totaled $546.245 million and the other $375 million. Both bonds have serial maturities from 2009 to 2033.

Merrill Lynch & Co. was the successful bidder out of five bids on the 2008C series of $546.245 million, said Karl Roeber, spokesman for the Washington State Treasurer's Office.

The bond has a coupon of 3.5% for the 2009 bonds, increasing to 4% for the serials from 2010 and 5% from 2013 to 2033, said Svein Braseth, director of the state treasury's bond program.

Citigroup Global Markets was the successful underwriter out of three bids on the 2008D series of $375 million motor vehicle fuel tax general obligation bonds. The coupon is 3.5% in 2009 and increases to 4.5% in 2013, and then up to 5% for the remaining maturity term, Braseth said.

The state is awaiting final pricing and yield information, he said.

The 2008C series are various purpose general obligation bonds, with the proceeds to be used to pay and reimburse state expenditures for various state capital projects, state buildings and facilities for institutions of higher education, and state programs for Hood Canal aquatic rehabilitation, farmlands preservation and riparian protection.

The 2008D series proceeds will be used to pay and reimburse state expenditures for construction of selected transportation projects or improvements.

"The state's economy and strong credit rating have a direct bearing on our sale and these excellent results show that Washington is on the right track," Washington State Treasurer Michael J. Murphy said in a statement following the sale.

Port of Tacoma's bonds price

In other pricing action Tuesday, Port of Tacoma, Wash., negotiated the terms of two bonds Tuesday totaling $130.3 million, including $109 million in 2008 series A bonds and $21.3 million in 2008 series B bonds.

"The port decreased the size of the series A [bonds] to $109 million because the pricing of the bonds came with a premium attached," said John Bonow of Public Financial Management, Port of Tacoma's financial advisor, in an interview Tuesday.

"Basically, the port could fund what it needed to fund with less. Series B had a slight discount attached to them and they increased the amount [of series B] slightly by about $300,000."

The series A bonds, when put out for competitive bids, were presented at just over $113 million and the series B bonds at $21 million.

Both series of bonds included term and serial bonds.

The series A bonds included a term bond due 2033 and a term bond due 2038. The 2033 bond priced with a 5% coupon with a yield to the call in 2018 of 4.35% and a yield to maturity of 4.641%. The 2038 bond also priced with a 5% coupon with a yield to call in 2018 of 4.38% and a yield to maturity of 4.684%.

The series B term bonds included a 2033 term bond with a 4.75% coupon and a 4.81% yield to maturity, as well as a 2038 term bond with a 4.875% coupon priced at par.

Port of Tacoma serials

The series A bonds included serial bonds with maturities ranging from 2014 to 2030. The yields ranged from 3.32% in 2014 to 4.599% in 2030.

The series B bonds also included serial bonds with maturities from 2014 to 2029 with yields ranging from 3.65% in 2014 to 4.75% in 2029.

David Morrison, finance director for the Port of Tacoma, said in an interview Tuesday that the proceeds will be used for environmental mitigation, dredging and land purchases.

"There's a whole list of projects," Morrison noted.

Elsewhere, New York's Albany Industrial Development Agency/St. Peter's Hospital reportedly priced $168 million in bonds (Baa2/BBB+).

Clark County, Nevada's $200 million issues

Coming up, Clark County, Nev., will reportedly sell $200 million in two issues of sales and excise tax revenue (streets and highways projects) commercial paper notes.

Moody's Investors Service Tuesday rated the bonds P-1.

The bonds, according to Moody's, will be sold in two series - series 2008A and series 2008B - for $100 million each.

Clark County will sell the bonds on Jan. 23, Moody's said, but the information could not be confirmed Tuesday afternoon with the issuer.

Citigroup Global Markets, Inc. is the lead manager for the series 2008A bonds and UBS Securities LLC is the lead for the 2008B bonds.

New York hospital to issue bonds in March

Orange Regional Medical Center in Middletown, N.Y., received a Ba1 rating Tuesday from Moody's Investors Service on its $260 million series 2008 bond. The outlook is stable.

The bonds, which will be issued by the Dormitory Authority of the State of New York, are expected to price March 25.

The lead underwriter is Merrill Lynch & Co., with JPMorgan Chase & Co. and Morgan Stanley serving as co-managers in the negotiated sale.

"We're engaging underwriters to hit the markets aggressively to find buyers for our bonds," Mitchell Amado, Orange Regional Medical Center's chief financial officer, said Tuesday.

The bonds are expected to have serial maturities of 30 years, but nothing is set yet, including the pricing.

"We're hoping we go on a good day and we get as low as the market will allow us," Amado said. "It's a very exciting project."

The proceeds from the sale will be used to fund the construction of a 374-bed replacement hospital, the first new hospital in New York in more than 20 years. The new medical center is expected to open in 2011.

All outstanding debt issued on behalf of Orange Regional Medical Center, formerly known as Arden Hill Hospital and the Horton Medical Center, through the Orange County Industrial Development Agency, N.Y., also will be refunded with the bond proceeds.

University of California's $300 million bonds

Later on this week, the University of California plans to price $300 million in bonds on a negotiated basis. Those bonds are set to price on Wednesday.

Also on the negotiated calendar for Wednesday are $157 million in bonds from a Texas issuer, Harris County Education Facilities.

In another Texas deal, Spring Independent School District also has a negotiated issue on the calendar for Wednesday in the form of $146.145 million in bonds.

© 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.