A Lehman Brothers syndicate edged out five other bidders to underwrite the Tennessee Valley Authority's $500 million offering, but some questioned at what price that win came.

"I just don't get it. What are you getting for only 27 basis points over Treasuries," Michael Bassett, a vice president at Stone & McCarthy Research said. "This is just total fantasy land to me," Mr. Bassett said. "Lehman is historically a very realistic bunch of people."

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