The municipal market was largely unchanged yesterday, despite early session gains.

"We saw some gains in the morning, but the Treasury gains faded as the day wore on, and we drifted back down," a trader in Los Angeles said. "We ended the day pretty flat overall."

Trades reported by the Municipal Securities Rulemaking Board yesterday showed little movement. Bonds from an interdealer trade of Tennessee Energy Acquisition Corp. 5.25s of 2026 sold at 5.61%, even with where they traded Monday. Bonds from an interdealer trade of New York's Metropolitan Transportation Authority 4.75s of 2031 yielded 4.86%, even with where they were sold Monday. Bonds from an interdealer trade of insured New Jersey Transportation Trust Fund Authority 5s of 2027 yielded 4.60%, one basis point lower than where they traded Monday.

The Treasury market was mixed. The yield on the benchmark 10-year Treasury note, which opened at 3.87%, was recently quoted at 3.90%. The yield on the two-year note was quoted recently at 2.38% after opening at 2.42%.

In the new-issue market yesterday, Siebert, Brandford, Shank & Co. priced $385.2 million of water supply system bonds for Detroit in two series. Bonds from a $190.4 million series of revenue refunding second-lien bonds mature from 2009 through 2029, with yields ranging from 2.08% with a 3% coupon in 2009 to 4.90% with a 4.5% coupon in 2029. Bonds from a $194.8 million series of revenue senior-lien bonds mature from 2010 through 2028, with term bonds in 2034 and 2035.

Yields range from 2.55% with a 5% coupon in 2010 to 4.83% with a 5.25% coupon in 2035. The bonds, which are callable at par in 2018, are insured by Berkshire Hathaway Assurance Corp. The underlying credit is rated A3 by Moody's Investors Service and A by both Standard & Poor's and Fitch Ratings.

Merrill Lynch & Co. priced $337.5 million of auction-rate conversion and new-money revenue bonds for the Washington Health Care Facilities Authority in multiple series. Bonds from two separate $50 million series mature from 2023 through 2028, with a term bond in 2034. Yields range from 4.77% with a 5.25% coupon in 2023 to 5.11% with a 5% coupon in 2034. Bonds from a third $50 million series mature from 2023 through 2028, with a term bond in 2034, with yields ranging from 4.77% with a 5.25% coupon in 2023 to 5.10% with a 5.25% coupon in 2034. Bonds from two separate $78.7 million series mature from 2012 through 2022, with term bonds in 2025, 2031, 2038, and 2041.

Yields range from 3.53% with a 4% coupon in 2012 to 5.21% with a 5% coupon in 2041. And bonds from a $30 million new-money series - the only non-auction-rate conversion series - mature in 2043, yielding 5.27% with a 5.5% coupon. All bonds are callable at par in 2018 and are insured by Financial Security Assurance Inc., except for the $30 million series, which is insured by Assured Guaranty Corp. The underlying credit is rated A1 by Moody's and A-plus by Standard & Poor's.

The Florida State Board of Education competitively sold $200 million of lottery revenue bonds to Merrill Lynch with a true interest cost of 4.51%. The bonds mature from 2009 through 2027, with yields ranging from 2.83% in 2010 to 4.79% in 2026, all with 5% coupons. Bonds maturing in 2009, from 2011 through 2019, and in 2024, 2025, and 2027 were not formally re-offered. The bonds, which are callable at 101 in 2017, declining to par in 2018, are rated A2 by Moody's, A by Fitch, and AAA by Standard & Poor's.

Goldman, Sachs & Co. priced $77.7 million of utilities system revenue refunding bonds for Brownsville, Tex. The bonds mature from 2009 through 2027, with a term bond in 2033. Yields range from 2.58% with a 4% coupon in 2010 to 4.82% with a 5% coupon in 2033. Bonds maturing in 2009 were decided via sealed bid. The bonds, which are callable at par in 2018, are insured by FSA. The underlying credit is rated A2 by Moody's and A by both Standard & Poor's and Fitch.

Horry County, S.C., competitively sold $62 million of general obligation bonds to Morgan Stanley, with a TIC of 3.99%. The bonds mature from 2009 through 2028, with yields ranging from 2.00% with a 5% coupon in 2009 to 4.56% with a 4.5% coupon in 2028. The bonds, which are callable at par in 2018, are rated Aa3 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch.

California's Riverside Unified School District competitively sold $50 million of GOs to Citi, with a TIC of 4.97%. The bonds mature from 2009 through 2032, with term bonds in 2034 and 2038. Yields range from 2.00% with a 5% coupon in 2009 to 4.86% with a 4.75% coupon in 2034. Bonds maturing in 2038 were not formally re-offered. The bonds, which are callable at 101 in 2017, declining to par in 2018, are insured by Assured Guaranty. The underlying credit is rated A1 by Moody's and A-plus by Standard & Poor's.

RBC Capital Markets priced $34 million of unlimited-tax school building bonds for Dallas County's Richardson Independent School District. The bonds mature from 2009 through 2027, with a term bond in 2033. Yields range from 2.20% with a 4% coupon in 2009 to 4.74% with a 5.25% coupon in 2033. The bonds, which are callable at par in 2018, are rated Aa1 by Moody's and AA-plus by Standard & Poor's.

Banc of America Securities LLC priced $27.7 million of refunding certificates of participation for Pasadena, Calif. The bonds mature from 2009 through 2019, with yields ranging from 2.40% with a 4% coupon in 2010 to 4.12% with a 4% coupon in 2019. Bonds maturing in 2009 were not formally re-offered. The bonds, which are callable at par in 2018, are rated AA-plus by Standard & Poor's and AA by Fitch.

The economic calendar was light yesterday. However, later this week, more economic data will be released. Preliminary first quarter unit labor costs and preliminary first quarter non-farm productivity will be released today, followed tomorrow by initial jobless claims for the week ended May 3, and continuing jobless claims for the week ended April 26, along with March wholesale inventories and March wholesale sales.

Economists polled by IFR Markets are predicting a 2.6% rise in unit labor costs, a 1.7% annual rate of non-farm productivity, 370,000 initial jobless claims, 3.000 million continuing jobless claims, a 0.5% rise in wholesale inventories, and a 0.7% gain in wholesale sales.

 

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