By Cristal Cody
Springdale, Ark., June 26 - The Michigan Tobacco Settlement Finance Authority priced $202.408 million tobacco settlement asset-backed bonds with an 8.2% true interest cost on Thursday, the authority's financial adviser told Prospect News.
The $114.86 million series 2008A fixed-rate current interest turbo term bonds (Baa3//BBB+) priced with a 6.875% coupon to yield 7.1%, said Wayne Workman, managing director of Robert W. Baird and Co.
The bonds are due June 1, 2038.
The $29.875 million series 2008B capital appreciation turbo term bonds (//BBB) due June 1, 2058 priced to yield 8.5%.
The $57.674 million series 2008C capital appreciation turbo term bonds (//BBB-) due June 1, 2058 priced to yield 8.75%.
All three series are expected to be paid off in 2033, Workman said.
Citigroup Global Markets was the senior manager of the negotiated sale.
Co-managers were Depfa First Albany Securities LLC, Comerica Securities Inc., Fifth Third Securities Inc., Lehman Brothers, Loop Capital Markets LLC and Merrill Lynch & Co.
Proceeds will be used to pay $60 million for a deposit to the state's general fund and to refund the authority's series 2006B and 2006C indexed floating-rate turbo term bonds.
| Issuer: | Michigan Tobacco Settlement Finance Authority
|
| Issue: | Tobacco settlement asset-backed bonds
|
| Total amount: | $202.408 million
|
| Type: | Negotiated
|
| True interest cost: | 8.2%
|
| Underwriter: | Citigroup Global Markets (lead)
|
| Pricing date: | June 26
|
| Settlement date: | July 7
|
|
|
| Current interest turbo term
|
| Issue: | Series 2008A current interest turbo term bonds
|
| Amount: | $114.86 million
|
| Coupon: | 6.875%
|
| Yield: | 7.1%
|
| Maturity: | June 1, 2038
|
| Ratings: | Moody's: Baa3
|
| Fitch: BBB+
|
|
|
| Capital appreciation turbo term
|
| Issue: | Series 2008B capital appreciation turbo term bonds
|
| Amount: | $29.875 million
|
| Yield: | 8.5%
|
| Maturity: | June 1, 2058
|
| Rating: | Fitch: BBB
|
|
|
| Capital appreciation turbo term
|
| Issue: | Series 2008C capital appreciation turbo term bonds
|
| Amount: | $57.674 million
|
| Yield: | 8.75%
|
| Maturity: | June 1, 2058
|
| Rating: | Fitch: BBB-
|
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