The municipal market was slightly weaker yesterday. Traders said tax-exempt yields were higher by two or three basis points.

"We're a bit weaker, pretty much the theme of the week," a trader in New York said. "We've got some supply coming in the primary, and that's probably weighing things down a bit. I'd say we're off two or three basis points at this point."

"We're down a little bit today, but not more than a few basis points," a trader in Los Angeles said. "I'd say we're off three basis points at most."

The Treasury market showed little movement yesterday. The yield on the benchmark 10-year Treasury note, which opened at 2.67%, finished at the same level. The yield on the two-year note was quoted near the end of the session at 0.88% after opening at the same level. The yield on the 30-year bond, which opened at 3.17%, was quoted near the end of the session at the same level.

In the new-issue market, RBC Capital Markets priced $393.3 million of unlimited-tax school building bonds for the Dallas Independent School District, following Tuesday's retail order period. The bonds mature in 2010, and from 2015 through 2031, with term bonds in 2034. Yields range from 2.35% with a 5% coupon in 2010 to 5.75% with a 6.375% coupon in 2034. The bonds, which are callable at par in 2018, are backed by Texas' triple-A Permanent School Fund guarantee program. The underlying credit is rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.

JPMorgan priced $315.9 million of revenue bonds for the Illinois Finance Authority on behalf of the University of Chicago. The bonds mature from 2013 through 2023, with term bonds in 2028, 2033, and 2038. Yields range from 3.28% with a 3.5% coupon in 2013 to 6.00% with a 6.25% coupon in 2038. The bonds, which are callable at par in 2018, are rated Aa1 by Moody's, AA by Standard & Poor's, and AA-plus by Fitch.

The Port Authority of New York and New Jersey yesterday was slated to competitively sell $300 million of taxable notes. However, when the issuer received no bids on the offering, it decided to postpone the sale.

"The Port Authority today tested the financial markets by offering a competitive sale of $300 million in short-term notes, and received no bids," the agency said in a statement. "The transaction was held well in advance of the need for capital funds, as is the Port Authority's standard practice, and the lack of bids will have no impact on any current Port Authority capital projects. Our credit ratings and our financial health remain strong, with Standard and Poor's and Fitch Ratings Inc. just in the last week reaffirming AA-minus ratings, and Moody's just reaffirming Aa3 ratings, and we are confident that the markets will recover in the upcoming year when we plan to return with another sale."

Morgan Stanley priced $204.7 million of refunding and improvement revenue bonds for Texas' Lower Colorado River Authority. The bonds mature from 2009 through 2020, with term bonds in 2023, 2028, 2031, and 2037. Yields range from 2.00% with a 4% coupon in 2009 to 6.80% with a 7.25% coupon in 2037. The bonds are callable at par in 2018, except those bonds maturing in 2037, which are callable at par in 2015. The credit is rated A1 by Moody's, A by Standard & Poor's, and A-plus by Fitch.

JPMorgan priced $169.2 million of mental health services facility revenue bonds for the Dormitory Authority of the State of New York. The bonds mature from 2009 through 2019, with term bonds in 2023 and 2031. Yields range from 2.05% with a 3% coupon in 2009 to 6.38% with a 6.25% coupon in 2031. The bonds, which are callable at par in 2018, are rated AA-minus by Standard & Poor's and A-plus by Fitch.

Banc of America Securities LLC priced $88.3 million of revenue notes, subject to the alternative minimum tax, for the San Francisco Airport Commission. The notes mature in December 2009, yielding 1.50% with a 3% coupon. The credit is rated MIG-1 by Moody's, SP-1-plus by Standard & Poor's, and F1 by Fitch.

The Sedgwick County, Kan., Public Building Commission competitively sold $43.8 million of revenue bonds to Citi with a true interest cost of 4.86%. The bonds mature from 2009 through 2028, with yields ranging from 2.75% with a 4% coupon in 2011 to 5.27% with a 5.25% coupon in 2026. Bonds maturing in 2009, 2010 from 2012 through 2019, and in 2025, 2027, and 2028 were not formally re-offered. The bonds, which are callable at par in 2018, are rated Aa1 by Moody's and AAA by Standard & Poor's and Fitch.

In economic data released yesterday, revised third-quarter non-farm productivity rose 1.3%, after a 1.1% rise the previous reading. Economists polled by Thomson Reuters had predicted a 1.0% climb.

Revised third-quarter unit labor costs climbed 2.8%, after a 3.6% uptick the previous reading. Economists polled by Thomson had predicted a 3.4% rise.

The Institute for Supply Management's non-manufacturing business activity composite index was 37.3 in November, down from 44.4 in October. Economists polled by Thomson Reuters had expected a 43.0 level.

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