Alabama, Puerto Rico price; Connecticut preps $500 million deal; market activity thins

By Cristal Cody

Tupelo, Miss., Aug. 7 - The states of Alabama and Washington and the Puerto Rico Electric Power Authority tapped the municipal bond markets on Wednesday, while trading stayed light, informed sources said.

Alabama sold $164.16 million in three tranches of series 2013 general obligation bonds (Aa1/AA/AA+) on Wednesday, a source close to the sale said.

"It went well," the source said. "The savings were actually exceeded."

Washington and Puerto Rico Electric Power Authority also tapped the muni bond markets on Wednesday, sources said.

Pricing terms were not immediately available.

Puerto Rico Electric Power was expected to price $600 million of series 2013A power revenue bonds.

"There was enough interest where they raised the amount up 10% to around $670 million," one source said.

Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the senior managers.

Final pricing terms were expected to be released on Thursday.

Otherwise, the day "was quiet, just like every day so far in August," a trader said. "There's not a lot of activity going on."

Municipal bonds closed about 2 bps weaker across the curve in thin activity, the trader said.

Alabama prices

Alabama sold $164.16 million in three tranches of series 2013 G.O. bonds (Aa1/AA/AA+), lower than the $172,525,000 originally expected, on Wednesday, a source close to the sale said.

The bonds were sold competitively with Public Financial Management Inc. as the financial adviser.

The state priced $129,235,000, down from an initial amount of $137.69 million, of series 2013A G.O. refunding bonds with a 2.47% true interest cost from winning bidder BofA Merrill Lynch. The tranche of bonds due 2014 to 2025 priced with 2.5% to 5% coupons to yield 0.17% to 3.28%.

The $33 million tranche of series 2013B G.O. capital improvement bonds priced with a 3.631% TIC from winning bidder BofA Merrill Lynch. The bonds due 2014 to 2033 were sold with 3% to 5% coupons to yield 0.17% to 4.4%.

The last tranche of $1,925,000, upsized from an initial size estimate of $1,835,000, of series 2013C G.O. refunding bonds priced with a 1.959% TIC from winning bidder Bernardi Securities, Inc. The bonds were sold with 2% to 3% coupons to yield 0.45% to 2.6% over the serial maturities from 2014 through 2021.

Proceeds will be used to finance economic development capital projects and refund existing G.O. debt.

Connecticut preps offering

Connecticut expects to be in the market with $500 million of G.O. bonds (Aa3/AA/AA) in a negotiated offering, according to a preliminary official statement.

The sale includes $100 million of series 2013A bonds due 2014 to 2023, $165 million of series 2013D bonds due 2014 to 2023 and $235 million of series 2013E bonds due 2014 to 2033.

M.R. Beal & Co. is the bookrunner.

Proceeds will be used for state projects.

Reedy Creek plans deal

Reedy Creek Improvement District in Orange and Osceola counties in Florida is prepping a $383.56 million offering of ad valorem tax bonds (Aa3/A+/AA-), according to a preliminary official statement.

The deal includes $344.15 million of series 2013A ad valorem tax bonds and $39.41 million of series 2013B ad valorem tax refunding bonds.

The series 2013A bonds are due 2014 to 2033 and have a term bond due 2038.

The refunding bonds are due 2014 to 2025.

Raymond James/Morgan Keegan and J.P. Morgan Securities LLC are the lead managers of the negotiated offering.

Proceeds will be used to finance the costs to design, construct, equip and improve roadways and parking facilities and to advance refund the outstanding series 2004 and series 2005 bonds.

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