Washington wants 5% coupon on $921.25 million GOs; Florida DEP prices $100 million revenue bonds

By Cristal Cody and Sheri Kasprzak

New York, Dec. 20 - Washington State treasurer's office is seeking a maximum 5% coupon on the $921.25 million in general obligation bonds planned for a Jan. 8 competitive sale, sources familiar with the issue said Thursday.

The state will issue $546.25 million in general obligation bonds and $375 million in motor fuel tax obligation bonds, said Karl Roeber, spokesman for the state treasury.

The state hopes for a 5% coupon on the longest maturity bonds, which will be structured as serials running from 2009 to 2033, said Svein Braseth, director of the treasury's bond program.

"It's expected the bonds will be very well received [with] a strong credit," he said.

The bonds are part of annual sales the state usually holds in January and July. The funds are slated for projects throughout the state, including transportation and land preservation, Braseth said.

Florida DEP bonds price

In other primary news, the Florida Department of Environmental Protection bonds reported earlier this week priced Wednesday, according to sources close to the offering.

A source who did not wish to be identified said Thursday that the bonds - $50 million in series 2007-A and $50 million in series 2007-B - are identical, except for their underwriters. Citigroup Global Markets is the lead for the 2007-A bonds and Goldman, Sachs & Co. is the lead for the 2007-B bonds.

Both series of variable-rate bonds have an initial coupon of 3.15%.

Both bonds are due July 1, 2027.

Proceeds will be used for a Florida Everglades restoration project.

Also set to price Thursday was a $500 million issue of sales tax revenue bonds (A1) from the Puerto Rico Sales Tax Financing Corp.

Proceeds from that offering will reportedly be used to repay debt obligations to the Puerto Rico Public Finance Corp.

Secondary market remains quiet ahead of holiday

On the secondary front, a trader said Thursday that, as the holidays approach, trading action in munis seems to be stalling.

"You know, it's close to the holidays, we're not seeing a whole lot of trades," he said. "Here and there, I'm getting a few smallish things."

Another trader said she hadn't observed any muni trades on her desk Thursday.

"It's been very slow," she said, adding that it doesn't really surprise her, given the time of the year.

Agencies seem to be trading more than munis these days, the trader did note.

Holidays hinder muni issuance

Even sell-siders seemed to be less than enthusiastic Thursday about new issues in the coming week.

"It's going to be really quiet next week," said one sell-sider when asked about any possible upcoming offerings. "With the holidays, nobody's really doing too much."

Another sell-sider agreed.

"I predict it will be a quiet week," he noted. "Lots of people are out, so it [new issues] will probably be very slow. Looking for things to pick up the first of the year."

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