Yields seen slightly lower; Tacoma, Wash., sells $187.16 million electric system revenue bonds

By Sheri Kasprzak

New York, July 13 - Municipal yields were reportedly slightly lower to flat on Tuesday amid light trading action, one trader said.

"It's been mostly reinvestments," he said.

"We're not seeing a great deal of activity apart from reinvestments. I suspect this will probably be the case until the end of the summer. Hopefully, by the fall, things will pick up."

Amid the primary action on Tuesday, the City of Tacoma in Washington priced $187.16 million in series 2010 electric system revenue bonds (Aa3/AA/AA-), said a pricing sheet.

"I think this [deal] really highlights how well the decent issuers can do in this market," said one sellsider familiar with the sale.

"If you've got a good rating, you can achieve good pricing, and I think it went very well for them. Unfortunately, some small towns and cities are getting hit with downgrades, and it's going to be harder and harder for small issuers to get the pricing they want."

The offering was comprised of $15.995 million in series 2010A bonds, $146.98 million in series 2010B Build America Bonds and $24.185 million in series 2010C bonds.

The 2010A bonds are due 2014 to 2015 with 2% to 5% coupons.

The 2010B bonds are due 2032 and 2035. The 2032 bonds have a 5.791% coupon, and the 2035 bonds have a 5.966% coupon. Both priced at par.

The 2010C bonds are due 2027 with a 5.641% coupon and priced at par.

J.P. Morgan Securities Inc. was the senior manager.

Proceeds will be used to finance improvements to the city's electric system.

Kentucky housing bonds sold

Elsewhere, the Kentucky Housing Corp. sold $116 million in series 2010 housing revenue bonds on Tuesday, said a pricing sheet.

The offering included $40 million in series 2010B non-AMT bonds, $10 million in series 2010C non-AMT bonds, $46 million in series 2010D AMT bonds and $20 million in series 2010E non-AMT bonds.

The 2010B bonds are due 2011 to 2022 with term bonds due 2024 and 2027. The coupons range from 0.5% to 3.95%. The 2024 bonds have a 4.05% coupon, and the 2027 bonds have a 5% coupon.

The 2010C bonds are due 2027 and 2033. The 2027 bonds have a 4.375% coupon, and the 2033 bonds have a 4.625% coupon.

The 2010D bonds are due 2015 to 2020 with term bonds due 2025 and 2027. Coupons range from 3.05% to 4.4%. The 2025 bonds have a 5.125% coupon. The 2027 bonds have a 5.25% coupon.

The 2010E bonds are due 2020, 2022, 2023, 2030 and 2035. The coupon is 3.625% for the 2020 bonds, 3.95% coupon for the 2022 bonds, 4% for the 2023 bonds, 4.5% for the 2030 bonds and 4.75% for the 2035 bonds.

All of the bonds priced at par.

Bank of America Merrill Lynch and Citigroup Global Markets Inc. were the senior managers.

The corporation will use the proceeds to fund mortgage loans and to refund its series 2000 bonds.

Mansfield ISD sells bonds

In other primary action, the Mansfield Independent School District of Texas priced $99.471 million in series 2010 unlimited tax refunding bonds, said a term sheet.

The bonds (Aa2/AA/AA+) were sold on a negotiated basis with Morgan Keegan & Co. Inc. as the lead manager.

The bonds are due 2013 to 2027 with coupons from 4% to 5%.

Proceeds will be used to refund a portion of the district's series 2002, 2003 and 2004 bonds.

Collier brings deal

Over on the competitive calendar, Collier County in Florida brought $62.5 million in series 2010 special obligation revenue bonds, said a pricing sheet.

The bonds (Aa2/AA/AA) were sold competitively with Barclays Capital Inc. winning the bid. The true interest cost came in at 4.269303%. Public Financial Management Inc. was the financial adviser.

The bonds are due 2011 to 2030 with a term bond due 2034. The serial coupons range from 3% to 4.5%. The 2034 bonds have a 5% coupon and priced at 103.078.

Proceeds will be used to refinance existing debt.

The county seat is Naples, Fla.

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