The municipal market was slightly weaker yesterday, following Treasuries.

"We started out pretty slow, but it picked up." a trader in New York said. "We're a little weaker, maybe two basis points cheaper at best. I'm only really giving something up because I want to move some paper, but this little sell-off helps a bit. It's hard to get retail to bite at these levels, so any little sell-off helps."

"It was definitely a slow day," a trader in Los Angeles added. "We're a little bit weaker on the day, but it's a basis point or two if anything. Not a whole lot going on."

The Treasury market showed some losses yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.80%, finished at 3.83%. The yield on the two-year note was quoted near the end of the session at 2.31% after opening at 2.24%. The yield on the 30-year Treasury finished at 4.46% after opening at 4.45%.

In the new-issue market yesterday, JPMorgan priced $255 million of pollution control revenue bonds for the Burke County, Ga., Development Authority in two series. Bonds from the $100 million Series A contain two maturities in 2033 - a $75 million uninsured piece, which yields 5.50% priced at par, and a $25 million piece which yields 5.30% priced at par, and is insured by Financial Security Assurance Inc. Bonds from the $155 million Series B are uninsured, and mature in 2043, yielding 5.70%, priced at par. All bonds are callable at par in 2018. The underlying credit is rated A3 by Moody's Investors Service and A by both Standard & Poor's and Fitch Ratings.

The Florida State Board of Education competitively sold $200 million of lottery revenue bonds to JPMorgan, with a true interest cost of 4.64%. The bonds mature from 2009 through 2028, with yields ranging from 2.58% with a 3.5% coupon in 2010 to 4.89% with a 5% coupon in 2027. Bonds maturing in 2009 and 2028 were not formally re-offered. The bonds are callable at par in 2018, declining to par in 2019. The credit is rated A2 by Moody's, AAA by Standard & Poor's, and A by Fitch.

Depfa First Albany Securities LLC priced $130 million of lease revenue bonds for the Dormitory Authority of the State of New York. The bonds mature from 2009 through 2028, with term bonds in 2033 and 2038. Yields ranging from 2.18% with a 3% coupon in 2010 to 4.95% with a 5% coupon in 2038. The bonds, which are callable at par in 2018, are rated Aa3 by Moody's and AA-minus by Standard & Poor's.

JPMorgan priced $105.2 million of lease revenue bonds for the Los Angeles Municipal Improvement Corp., following a retail order period Wednesday. The bonds mature from 2009 through 2026, with yields ranging from 1.75% with a 3.5% coupon in 2009 to 4.92% with a 5% coupon in 2026. The bonds, which are callable at par in 2018, are rated A2 by Moody's and AA-minus by both Standard & Poor's and Fitch.

RBC Capital Markets priced $98.5 million of unlimited tax school building bonds for Texas' Aldine Independent School District. The bonds mature from 2009 through 2029, with term bonds in 2031 and 2033. Yields range from 2.10% with a 3% coupon in 2010 to 4.92% with a 4.75% coupon in 2033. Bonds maturing in 2009 were decided via sealed bid. The bonds, which are callable at par in 2018, are backed by the Permanent School Fund guarantee program. The underlying credit is rated Aa2 by Moody's and AA-minus by Standard & Poor's.

Bernalillo County, N.M., competitively sold $42.2 million of taxable gross receipts tax revenue bonds to Raymond James & Associates, with a TIC of 3.88%. The bonds mature in Aug. 2010, and carry a 4% coupon. The bonds were not formally re-offered. The credit is rated SP-1-plus by Standard & Poor's.

Greenville County, S.C., School District competitively sold $39.6 million of general obligation bonds to Citi, with a net interest cost of 1.61%. The bonds mature in June 2009, yielding 3.00% priced at par. The bonds are rated Aa1 by Moody's.

Banc of America Securities LLC priced $37.5 million of revenue bonds for the Kings County, Calif., Housing Authority. The bonds mature from 2009 through 2018, with term bonds in 2028 and 2038. Yields range from 2.00% priced at par in 2009 to 5.50% priced at par in 2038. The bonds, which are callable at par in 2018, are rated AAA by Standard & Poor's.

Burlington County, N.J., competitively sold $32 million of general improvement bonds to Morgan Stanley, with a NIC of 3.68%. The bonds mature from 2009 through 2022, with yields ranging from 1.75% with a 2.5% coupon in 2009 to 4.08% with a 4% coupon in 2022. The bonds, which are callable at par in 2018, are rated Aa3 by Moody's and AA by Standard & Poor's.

In economic data released yesterday, initial jobless claims for the week ended Aug. 16 came in at 432,000, after a revised 445,000 the previous week. Economists polled by IFR Markets had predicted 448,000 initial jobless claims.

Continuing jobless claims for the week ended Aug. 9 came in at 3.362 million, after a revised 3.379 million the prior week. Economists polled by IFR Markets had predicted 3.400 million continuing jobless claims.

Also, the composite index of leading economic indicators dropped 0.7% in July after a revised no change the previous month. Economists polled by IFR Markets had predicted a 0.2% decline.

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