Munis Finish Unchanged to Slightly Weaker

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The municipal market was unchanged to slightly weaker yesterday.

"It's continued to be very quiet - things are trading by appointment," a trader in New Jersey said. "People aren't really willing to cut what they're asking for more than a few points."

"I think what's happening is guys are trying to get rid of some things before they leave for the long weekend," a trader in Chicago added. "I think it's just going to kind of drift into darkness. Unless you have something unique to sell, it's probably a bit soft."

The Treasury market, however, showed some gains yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.78%, finished at 3.76%. The yield on the two-year note was quoted near the end of the session at 2.27% after opening at 2.33%. The yield on the 30-year Treasury finished at 4.38% after opening at 4.39%.

In the new-issue market yesterday, Merrill Lynch & Co. priced $462.5 million of state personal income tax revenue bonds for the New York State Thruway Authority. The bonds mature from 2009 through 2028, with yields ranging from 2.08% with a 3% coupon in 2010 to 4.60% with a 5% coupon in 2028. Bonds maturing in 2009 were not formally re-offered. The bonds are callable at par in 2018, except those maturing in 2019, which are not callable. The credit is rated AAA by Standard & Poor's and AA-minus by Fitch Ratings.

Banc of America Securities LLC priced $342.7 million of water and sewer system revenue bonds for Charlotte, N.C. The bonds mature from 2010 through 2030, with term bonds in 2033 and 2038. Yields range from 2.03% with a 3.50% coupon in 2010 to 4.81% with a 5% coupon in 2038. The bonds, which are callable at par in 2018, are rated Aa1 by Moody's Investors Service and AAA by both Standard & Poor's and Fitch.

Citi priced $200 million of revenue refunding bonds for the Harris County, Tex., Education Facilities FinanceCorp. The bonds mature from 2009 through 2019, with term bonds in 2023, 2028, and 2032. Yields range from 2.61% with a 3% coupon in 2009 to 5.85% with a 5.625% coupon in 2032. The bonds, which are callable at par in 2018, are rated A by Standard & Poor's.

RBC Capital Markets priced $145.2 million of revenue refunding bonds for Arizona's McAllister Academic Village LLC. The bonds mature from 2010 through 2028, with term bonds in 2030, 2033, 2038, and 2039. Yields range from 2.53% with a 3.50% coupon in 2010 to 5.52% with a 5.25% coupon in 2039. Bonds maturing from 2021 through 2023 were not formally re-offered. The bonds, which are callable at par in 2018, are rated A1 by Moody's and AA-minus by Standard & Poor's.

RBC also priced $92.6 million of unlimited-tax school building bonds for Texas' La Joya Independent School District. The bonds mature from 2010 through 2027, with term bonds in 2030, 2034, and 2038. Yields range from 2.15% with a 3.25% coupon in 2010 to 5.10% with a 5% coupon in 2039. The bonds, which are callable at par in 2018, are backed by the state's triple-A Permanent School Fund guarantee program. The underlying credit is rated A3 by Moody's and A by Standard & Poor's.

Syracuse, N.Y., competitively sold $75 million of revenue anticipation notes to Depfa First Albany Securities LLC. Depfa won the Rans in two $37.5 million components, at net interest costs of 2.03% and 2.13%. The notes, which mature in June 2009, are priced at par to yield 2.75%.

The Alabama Housing Finance Authority competitively sold $30 million of collateralized single-family mortgage revenue bonds to Raymond James & Co. at a true interest cost of 5.36%. The bonds mature from 2010 through 2033, with a term bond in 2039. Yields range from 2.50% at par in 2010 to 5.375% at par in 2039. The bonds, which are callable at par in 2018, are rated Aaa by Moody's.

Rockland County, N.Y., competitively sold $21.6 million of bond anticipation notes to Roosevelt & Cross at an NIC of 1.77%. The Bans, which mature in September 2009, are priced at par to yield 3.00%.

In economic data released yesterday, July durable goods orders increased 1.3%, more than the 0.1% rise expected by economists polled by IFR Markets, while orders excluding transportation gained 0.7%, compared to the 0.3% drop forecast by IFR.

Today, initial jobless claims for the week ended Aug. 23, continuing jobless claims for the week ended Aug. 16, and preliminary second quarter gross domestic product are due. Tomorrow, personal income and consumption for July will be released, along with the core personal consumption expenditures deflator, the August Chicago purchasing managers index, and the final August University of Michigan consumer sentiment index.

Economists polled by IFR Markets are predicting a 427,000 initial jobless claims, 3.400 million continuing jobless claims, 2.7% annual growth rate for GDP, a 0.1% decline in personal income, a 0.2% increase in personal consumption, a 0.3% rise to the core PCE deflator, a 49.8 Chicago PMI reading, and a 62.0 reading for the Michigan sentiment index.

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