Illinois postpones $1.4 billion competitive sale; Seattle brings $257.75 million via competitive sale

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, Dec. 10 - Despite a hefty calendar of sales Thursday, one offering that won't be pricing is the State of Illinois' $1.4 billion competitive offering of general obligation certificates.

The offering was pushed back to Tuesday. The delay comes just a day after Illinois governor Rod Blagojevich's arrest on federal charges of conspiracy to commit wire and mail fraud and solicitation of bribery.

Illinois budget director Ginger Ostro said Tuesday that the arrest would not impact the state's cash position, its need for short-term capital or its ability to repay the short-term financing.

Other competitive sales will go on as planned. Miami-Dade County in Florida will move ahead with its slashed $172 million in G.O. bonds competitively. The county had originally planned to sell $350 million.

The Colorado Education Loan Program also has a competitive deal in the works for Thursday. The program will price $300 million in tax and revenue anticipation notes.

Also coming up for Thursday is a negotiated offering of $425 million in Garvee bonds from the Maryland Transportation Authority and $600 million in revenue bonds sold for Harvard University by the Massachusetts Health and Educational Facilities Authority.

Seattle brings $257.75 million

Moving to light pricing action from Wednesday, the City of Seattle sold $257.745 million in series 2008 municipal light and power improvement and refunding revenue bonds, said Michael Van Dyck, the city's director of debt financing.

Merrill Lynch & Co. was the winner of the competitive sale with a 5.5% true interest cost. Van Dyck said the offering received five bids with all the major desks participating.

The full details of the sale were not immediately available Wednesday evening.

The bonds (Aa2/AA-/) were due 2009 to 2034.

Proceeds will be used for improvements to and conservation projects for the city's light system as well as for refunding existing bonds.

Ohio Housing sale delayed

In other news Wednesday, the Ohio Housing Finance Agency postponed its $50 million series 2008K residential mortgage revenue bonds (Aaa/VMIG1) until after Jan. 1, according to a spokesman for the agency.

The agency cited difficult market conditions for the withdrawal of the offer.

Citigroup was mandated to act as lead underwriter for the issue.

The regularly scheduled offering contained bonds due 2010 to 2018 with term bonds due 2023, 2028, 2033 and 2039.

Proceeds would have been used for mortgage loans to low- and moderate-income individuals and families.

Moving out West, the San Antonio Electric & Gas Systems may be following in the Ohio agency's footsteps if it can't draw some interest on Thursday, said an insider familiar with the deal.

The system had been planning to sell $218.635 million in series 2008A revenue refunding bonds (Aa1/AA+/AA) this week. The bonds are due 2010 to 2018.

Proceeds will be used to refund the system's outstanding series 1998A bonds.

Morgan Stanley & Co., Merrill Lynch and Banc of America Securities are the underwriters.

Secondary remains quiet

Meanwhile, in the secondary market, trading activity remained light Wednesday as municipals dipped a few basis points, said one trader reached in the afternoon.

"I'd say the long end is off more than the short end, probably two or three basis points today," the trader said. "Not a whole lot is trading today. It's been quiet. I suspect it will be pretty slow through the end of the year."

In specific trades Wednesday, the Commonwealth of Massachusetts's series 2008A G.O. refunding bonds were in play with the 3.375% 2015s trading at 3.46%.

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