Tacoma port feels Wall Street woes

Tacoma port feels Wall Street woes The ongoing financial turmoil on Wall Street hit the Port of Tacoma this week, as port officials were forced to shift nearly $150 million in bond deals handled by the now-defunct Lehman Brothers to other financial institutions.
   Lehman Brothers' collapse into bankruptcy on Sept. 15 automatically terminated two bond deals involving the financial services firm and the port.
   Lehman served as the resale broker for a $117 million port bond issued in March, handling redemption and resale of the bonds to the broader financial markets. Following Lehman's collapse, the port shifted this work to Barclays Capital Services, which acquired Lehman's bond resale services, and J.P. Morgan.
   Splitting the work between Barclays and J.P. Morgan will allow the port to evaluate each firm's performance, and based on this shift some or all of the work at a future date to one or the other of the firms without penalties.
   The Lehman collapse also terminated a bond financing arrangement covering $30 million in bonds, part of a larger $100 million port bond issuance in 2005. Port officials will face a $1.4 million expense by ending the Lehman contract, but hope to recoup the loss through the lower interest rate obtained in shifting the financing to Morgan Stanley Capital Services.
   Port officials said they were concerned about how further volatility on Wall Street would affect the port's long term plans.
   The port's current capital development plan forecasts the need for more than $600 million in financing by 2013, much of which was to be financed by further bond issuances.
   Transportation industry analyst John Fontanella, vice president of Research for Boston-based AMR Research, said the financial implosion and the impending $700 billion federal government bailout of Wall Street would likely have long-lasting impacts for the industry.
   'Borrowing is going to be very hard because the market is credit starved and will be (for some time). Big infrastructure projects may have to go on hold,' Fontanella said.