Cornell University brings $500 million in oversubscribed bonds; El Paso Electric wraps $100.6 million

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, March 26 - The overloaded primary market settled down Thursday, and the market was virtually unmoved as a result, market insiders said.

A few offerings were priced, however, including a $500 million sale of taxable bonds from Cornell University.

The El Paso Electric Co. was also in the market with a $100.6 million sale of refunding revenue bonds.

"Primary has been overloaded the past couple of weeks, but it looks like it's settling back down," said one trader reached Thursday afternoon.

"We're pretty much unchanged today. We have seen some decent demand today."

In the Cornell offering, the university sold two equal tranches of $250 million in bonds, said Simeon Moss, the university's spokesman.

The $250 million five-year bonds priced at a spread of Treasuries plus 257.5 basis points. The tranche was priced at 99.932 with a coupon 4.35% to yield 4.367%. It has a make-whole call at Treasuries plus 40 bps.

The $250 million 10-year bonds came at a spread of Treasuries plus 270 bps. This portion priced at 99.888 with a coupon 5.45% to yield 4.566%. There is a make-whole call at Treasuries plus 45 bps.

J.P. Morgan Securities Inc. acted as lead underwriter for the negotiated deal.

Proceeds will be used for general corporate purposes.

Cornell University is located in Ithaca, N.Y.

El Paso sells $100.6 million

Elsewhere in primary, the El Paso Electric Co. brought $100.6 million in series 2009 Palo Verde Project pollution control refunding revenue bonds, said a form 8-K filed Thursday with the Securities and Exchange Commission.

The sale included $63.5 million in series 2009A bonds and $37.1 million in series 2009B bonds.

The 2009A bonds are due Feb. 1, 2040, and bear interest at 7.25%, priced at par. The 2009B bonds are due April 1, 2040, and bear interest at 7.25%, also priced at par.

Proceeds from the bonds will refund the corporation's outstanding series 2005B and 2005C auction-rate bonds, which had 8% and 9.15% rates, respectively.

Tennessee school bonds to price

Moving to upcoming sales, the Tennessee State School Bond Authority will price its previously announced $133.02 million in higher education facilities second program bonds Tuesday, said Mary-Margaret Collier, the authority's director of bond finance.

The authority will conduct a two-day retail order period beginning Friday, Collier said.

The bonds (Aa2/AA/AA) will be sold on a negotiated basis with J.P. Morgan Securities Inc. as the senior manager.

The sale includes $113.56 million in series 2009A higher education facilities second program bonds, which are due 2010 to 2039, and $19.46 million in series 2009B higher education facilities second program refunding bonds, which are due 2010 to 2021.

Proceeds will be used to retire outstanding debt and construct new university facilities within the state.

The authority is headquartered in Nashville.

Pima County's G.O.s

In other upcoming sales, Pima County of Arizona is expected to price $75 million in series 2009 general obligation bonds on April 7, said a preliminary official statement.

The bonds (Aa3/AA-/) will be sold competitively with RBC Capital Markets Corp. as the financial adviser.

The maturities range from 2009 to 2023.

Proceeds will be used for capital projects.

Secondary remains unmoved

As the municipal market continued to digest the large number of primary offerings, the market remained unchanged Thursday, a trader said.

Trading volume remained fairly strong, however.

Among specific trades, the New York State Environmental Facilities Corp.'s series 2009D state clean water and drinking water revolving fund revenue bonds were in action.

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