Long bonds close out weaker; Energy Northwest brings $431.98 million upsized refunding bonds

By Sheri Kasprzak

New York, March 10 - Municipals were off slightly on Thursday, particularly on the long end of the curve, as little supply made it difficult for the market to find a direction, market insiders said.

"We've had more supply, that's true, but it's all high-grade stuff," said one trader.

"It's really hard to tell how a lower-grade bond would price right now. It's tough to find a direction for the market. Long bonds especially are struggling. They're off maybe 2 to 4 bps out long."

Alan Schankel, managing director with Janney Montgomery Scott LLC, said Thursday that although the week has included some major offerings, including deals from Maryland and the Georgia State Road and Tollway Authority, the deals offered little insight into lower-rated bonds.

"Activity was aided by competitive sales on two triple-A credits, state-guaranteed Georgia Road and Tollway Authority and Maryland G.O., both offering price discovery to validate the AAA benchmarks but shedding little light on the lower rungs of the credit curve," Schankel said.

Energy Northwest brings bonds

Heading up Thursday's primary action, Energy Northwest of Richland, Wash., sold $431.98 million of series 2011 revenue refunding bonds, said a pricing sheet. The deal was upsized from $368.895 million.

The deal includes $310.23 million of series 2011A Columbia Generating Station electric revenue refunding bonds, $91.83 million of series 2011A Project 3 revenue refunding bonds and $29.92 million of series 2011B Columbia Generating Station electric revenue refunding bonds.

The 2011A Columbia bonds are due 2013 to 2017 and 2021 to 2023 with coupons from 3% to 5%. The 2011A Project 3 bonds are due July 1, 2018 with a split maturity. The bonds have a 4% coupon priced at 107.538 and a 5% coupon priced at 114.039. The 2011B Columbia bonds are due 2019 and 2023 to 2024 with coupons from 4.19% to 5.19%, all priced at par.

Citigroup Global Markets Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC were the senior managers.

Proceeds will be used to refund existing debt.

Lewis & Clark bonds price

Elsewhere, the Oregon Facilities Authority priced $108.61 million of series 2011A revenue bonds for Lewis & Clark College, said an official statement.

The bonds (A3/A-/) were sold through Prager, Sealy & Co. LLC.

The bonds are due 2015 to 2021 with term bonds due 2024, 2027, 2030, 2036 and 2041. The serial bonds have 4% coupons. The 2024 bonds have a 5.25% coupon to yield 4.9%. The 2027 bonds have a 5% coupon to yield 5.19%. The 2030 bonds have a 5.25% coupon to yield 5.4%. The 2036 bonds have a 5.625% coupon to yield 5.7%, and the 2041 bonds have a 5.75% coupon to yield 5.75%.

Proceeds will be used to construct educational facilities at Lewis & Clark College and to refund the authority's series 2008 bonds.

The college is located in Portland.

Portland sells water bonds

In other pricing action, the City of Portland, Ore., priced $82.835 million of series 2011A first-lien water revenue bonds, said a pricing sheet.

The bonds (Aaa) were sold competitively with Wells Fargo Securities LLC winning the bid.

The bonds are due 2012 to 2036 with coupons from 3% to 5%.

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

Everett bonds sold

Also in the competitive market Thursday, the City of Everett, Wash., brought $51 million of series 2011 water and sewer revenue bonds, said a pricing sheet.

The bonds (/AA+/) were sold competitively with JPMorgan winning the bid. The true interest cost for the bonds came in at 4.388425%.

"We choose to sell competitively because we believe it is in the utility's best interest to do so," said Susy Haugen, the city's treasurer.

The bonds are due 2014 to 2032 with a term bond due in 2035. Coupons range from 2.5% to 5%. The 2035 bonds have a 5% coupon priced at 101.415.

Proceeds will be used to improve and replace the city's pipeline, expand its sewer capacity, replace lift stations and make other improvements and upgrades to its water and sewer system.

Boston deal ahead

Looking ahead, the City of Boston plans to sell $181.525 million of series 2011 general obligation bonds on Wednesday, said a preliminary official statement.

The offering includes $86.355 million of series 2011A bonds, $38.9 million of series 2011B bonds, $41.625 million of series 2011C qualified school construction bonds and $14.645 million of series 2011D bonds.

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

The 2011A bonds are due 2012 to 2031, and the 2011B bonds are due 2012 to 2027. The 2011C bonds are due 2017 to 2026, and the 2011D bonds are due 2013 to 2016.

Proceeds will be used to refund the city's series A convention center loan special obligation bonds and to finance various capital projects, including the construction and renovation of schools.

Lubbock bonds set

Also in the coming week, the City of Lubbock, Texas, is set to price $144.43 million of series 2011 G.O. bonds and revenue certificates of obligation on Tuesday, said a preliminary official statement.

The offering includes $13.53 million of series 2011 G.O. bonds, $16.245 million of series 2011 G.O. refunding bonds and $114.655 million of series 2011 tax and waterworks system revenue certificates of obligation.

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

The 2011 G.O. bonds are due 2012 to 2031, and the 2011 G.O. refunding bonds are due 2012 to 2022. The 2011 tax and waterworks certificates of obligation are due 2012 to 2031.

Proceeds will be used to finance public safety and street improvements and improvements to water, sewer and storm water utilities. The G.O. refunding bonds will be used to refund existing debt for a 3% net present value savings.

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