Washington State achieves lowest TIC in 30 years; Colorado brings $650 million competitively

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, July 14 - Primary action picked up on Tuesday, with billions in offerings priced - including a $765 million deal from the State of Washington.

"We're seeing a ton of stuff lately," noted one sellside source reached during the day.

"I'm not really sure what's pushing the primary market right now, but this time of year, things are usually pretty quiet."

Washington sold $765.115 million of general obligation bonds in three tranches, according to Chris McGann, a spokesman for the state treasurer.

The $298.8 million series 2010A various purpose G.O. bonds priced at a true interest cost of 4.43%. The bonds carry maturities from 2017 to 2034.

The $401.41 million series 2010B motor vehicle fuel tax G.O. bonds priced at a TIC of 4.275%. The bonds carry maturities from 2010 to 2034.

The $64.905 million 2010T taxable G.O. bonds priced at a TIC of 3.003%. The bonds carry maturities from 2010 to 2016.

"We got great rates," McGann said.

The TIC of the motor vehicle fuel tax bonds was "the lowest rate we've seen in Washington for 30 years," he said.

J.P. Morgan Securities Inc. won the auctions for all three tranches, which saw six, six and 16 bidders, respectively. Montague DeRose & Associates LLC acted as financial adviser.

Proceeds from the sales will be used for general capital expenditures, affordable housing, transportation, environmental and agricultural projects.

Back to Colorado

Colorado priced $650 million in series 2009A general fund tax and revenue anticipation notes at a TIC of 0.445473%, according to Stifel, Nicolaus & Co.'s Elisa Keesey.

JPMorgan purchased $625 million of the notes.

Citigroup Global Markets Inc. bought $20 million, while Piper Jaffray & Co. purchased $5 million.

Stifel Nicolaus acted as financial adviser.

The 2% notes are due on June 15, 2010.

Proceeds will be used to fund anticipated shortfalls in the 2009-2010 budget.

Iowa sells I-Job bonds

In other primary action, the State of Iowa priced Tuesday $602.375 million in series 2009 I-Jobs Program special obligation bonds (Aa3/AA/), said a sellside source connected to the deal.

The sale included $387.445 million in series 2009A tax-exempt bonds and $214.93 million in series 2009B Build America Bonds

The 2009A bonds are due 2011 to 2029 with coupons from 4% to 5% and yields from 1.2% to 4.64%. The 2009B bonds are due 2034 with a 6.75% coupon to yield 6.8%.

Barclays Capital Inc. was the senior manager.

Proceeds will be used to fund the I-Jobs Program, which invests in the state's infrastructure.

Green Mountain bonds

The Vermont Municipal Bond Bank priced $90.44 million in new money and refunding bonds, according to executive director Robert Giroux.

Many of the details of the sale were not yet available for the "slightly larger than normal" issue, Giroux said.

Still, "we were happy with the yields we got," he said.

Most of the bank's issues occur near the Independence Day holiday.

Citigroup acted as underwriter for the negotiated bonds.

Proceeds from the $64.75 million 2009-1 bonds will be used by 22 municipalities for projects ranging from a new septic system to a fire truck.

The $25.69 million 2009-2 refunding bonds will be used to retire outstanding debt.

The Vermont Municipal Bond Bank is located in Montpelier, Vt.

Metro D.C. cleared for $1.3 billion

Moving to upcoming offerings, the Metropolitan Washington Airports Authority in Washington, D.C., is concluding its preparation for an up to $1.3 billion series 2009 bond issue during the "first week of August," said Valerie O'Hara, debt program manager.

The issue has not been included in many calendars, but the authority has been approved to issue and the deal is "fairly firm," O'Hara said.

Citigroup and Morgan Stanley & Co. Inc. have been asked to act as underwriters for the negotiated deal.

Secondary market firms

Looking to the secondary market, a trader said she saw some firming in the market despite weakness in the Treasuries market.

"It really is interesting, since we usually follow Treasuries, but we're better by a couple of basis points at least," said the trader. "We're looking, maybe, a little more attractive than Treasuries."

In trading action Tuesday, the Public Power Generating Agency of Nebraska saw its recently priced Whelan Energy Center Unit 2 revenue bonds moving. The 7.242% 2041 bonds were seen trading at 7.004% after pricing at par. The 4.25% 2018 bonds were seen at 4.276% after pricing at 4.55%. The 3.5% 2014s were seen at 3.141% after pricing at 3.48%.

Elsewhere, the New Jersey Economic Development Authority's project revenue bonds for United Water Inc. were seen in action. The 5.5% 2039s were seen at par. The bonds priced Monday at par.

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