The recent Boston Edison Co. $675 million rate reduction bond deal priced to record tight spreads for the sector, coming on the heels of a $1.9 billion rate reduction bond deal from Pacific Gas and Electric Co. last month that also re-priced the sector (see ASR, 2/7/05). Goldman Sachs and Lehman Brothers led the four-tranche deal tagged Massachusetts RRB 2005-1.
Its $109 million A1 tranche priced two basis points through EDSF. The $154 million A2 tranche priced one basis point through swaps, and the $144 million A4 tranche priced 10 basis points above swaps, all representing the tightest ever spreads to swaps for a stranded cost offering. The $266 million A3 tranche was the only class not to set a new record, but instead tied the spread of the A3 tranche of last month's PG&E deal at swaps plus three basis points.