The municipal market was largely unchanged yesterday, as market participants returned from a long weekend.

"It's somewhat quiet," a trader in New York said. "Everyone's kind of starved for paper right now, looking for some of these deals this week to help a bit. But there's probably going to be at least another week of this stale market, with the same offerings."

Trades reported by the Municipal Securities Rulemaking Board yesterday showed little movement. Bonds from an interdealer trade of Massachusetts 5s of 2032 yielded 4.73%, even with where they traded Friday. A dealer sold to a customer Ohio's Buckeye Tobacco Settlement Financing Authority 5.125s of 2024 at 8.29%, even with where they were sold Friday. A dealer bought from a customer insured Nevada 5s of 2023 at 4.57%, even with where they were sold Friday. A dealer sold to a customer King County, Wash., 5.5s of 2028 at 4.64%, even with where they traded Friday.

Bonds from an interdealer trade of California 5s of 2038 yielded 5.59%, down two basis points from where they were sold Friday. Bonds from an interdealer trade of Illinois 5s of 2024 yielded 4.33%, up one basis point from where they traded Friday. Bonds from an interdealer trade of New York State Urban Development Corp. 5s of 2024 yielded 4.39%, even with where they traded Friday.

"I think we're pretty flat overall," a trader in Los Angeles said. "We were down a bit early, then maybe up a bit a little later in the morning, but all in all, I'd say we're just flat. Not a whole lot of movement out there, and not a whole lot of trading going on."

The Treasury market showed gains yesterday. The yield on the benchmark 10-year note, which opened at 2.89%, was quoted near the end of the session at 2.65%. The yield on the two-year note was quoted near the end of the session at 0.87% after opening at 0.95%. The yield on the 30-year bond, which opened at 3.67%, was quoted near the end of the session at 3.49%.

Sizable transportation, health care, utility, and state general obligation deals will highlight a plentiful new-issue calendar that calls for an estimated $4.56 billion in new volume this week, according to Thomson Reuters.

Despite it being a short week due to Monday's Presidents Day holiday, more debt is expected than last week, when a revised $4.16 billion in competitive and negotiated deals were priced.

This week the primary market activity kicks off in the southeast, anchored by a $600 million Georgia State Road and Tollway Authority highway revenue bond offering, while a flurry of deals is also forecast for the Northeast region.

The Georgia deal is scheduled to be priced today by Barclays Capital, and consists of $480 million of federal highway grant anticipation revenue bonds and $120 million of federal highway reimbursement revenue bonds.

Both series will mature serially from 2010 to 2029 and will be rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.

Health care issuers in three states will come to market this week to issue a combined $571 million of debt on behalf of borrower Ascension Health Obligated Group in what will be one of the largest such deals to be priced in months and which is a conversion of variable-rate weeklies to fixed-rate debt.

The multi-state offering will be priced by book-runner Citi today and is rated Aa1 by Moody's, AA by Standard & Poor's, and AA-plus by Fitch.

The deal includes a conversion of $371.7 million of variable-rate revenue bonds in the weekly mode originally issued by the Connecticut Health and Educational Facilities Authority and the Michigan State Hospital Finance Authority, as well as a $198.4 million conversion of variable-rate bonds in a weekly mode originally issued by the Indiana Health Facility Financing Authority. According to sources familiar with the deal, it will mature out to five years, but the exact structure of the issue will be determined by the prices and market conditions on Wednesday.

Activity in the new-issue market was light yesterday.

In economic data released yesterday, the Empire State Manufacturing Survey "indicates that conditions for New York manufacturers deteriorated significantly in February," the Federal Reserve Bank of New York reported, as the general business conditions index widened to negative 34.65 in February from negative 22.20 in January. Economists surveyed by Thomson Reuters had expected the index would be negative 22.20.

Later this week, a slate of economic data will be released. Today, January import prices, housing starts, and building permits will be released, along with January industrial production and capacity utilization. Tomorrow, initial jobless claims for the week ended Feb. 14 and continuing jobless claims for the week ended Feb. 7 will be released, alongside the January producer price index, and the composite index of leading economic indicators. On Friday, the January consumer price index will be released.

Economists polled by Thomson Reuters are predicting a 1.4% drop in import prices, 530,000 housing starts, 530,000 building permits, a 1.5% decline in industrial production, 72.5% capacity utilization, 620,000 initial jobless claims, 4.850 million continuing jobless claims, a 0.2% rise in PPI, a 0.1% climb in PPI core, no change to the LEI, a 0.3% uptick in CPI, and a 0.1% increase in core CPI.

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