The municipal market was unchanged to slightly firmer yesterday, as JPMorgan continued retail pricing on the mammoth $8.8 billion California revenue anticipation note sale.

Traders said tax-exempt yields were flat to lower by two or three basis points.

“There isn’t a ton of movement out there, but we’re feeling a little bit firmer again,” a trader in New York said. “It’s flat in spots, maybe better by a couple basis points in others. It’s sort of spread out too, no specific area of the curve where gains are more pronounced than others. Just pretty much flat to a basis point or two better across the board.”

JPMorgan continued the retail pricing on California’s $8.8 billion Ran deal for a second day yesterday, ahead of institutional pricing today. The deal, which is the single-largest note deal so far this year, consists of Series A1 notes, which mature May 25, 2010, and Series A2 notes, which mature June 23, 2010. The state will use a portion of the proceeds to repay JPMorgan, which lent California $1.5 billion in August to allow the state to begin redeeming the IOUs.

In yesterday’s retail pricing, the $3.5 billion piece maturing in May 2010 yields 1.25% with a 3% coupon, while the $5.3 billion June 2010 piece yields 1.50% with a 3% coupon.

Tom Dresslar, spokesman for state Treasurer Bill Lockyer, said late Monday that “no decisions have been made yet, but we’re exploring the possibility of shutting off the June maturity at $6 billion,”

If that’s the case, Dresslar said, and the $6 billion threshold is reached, the treasurer hopes investors will gravitate to the May maturity.

The Rans are rated MIG-1 by Moody’s Investors Service, SP-1 by Standard & Poor’s, and F2 by Fitch Ratings.

The Treasury market showed some gains yesterday. The yield on the benchmark 10-year note, which opened at 3.48%, finished at 3.45%. The yield on the two-year note finished at 0.97% after opening at 0.98%, while the yield on the 30-year bond, which opened at 4.23%, finished at 4.20%.

Yesterday, the Municipal Market Data triple-A scale yielded 2.65% in 10 years and 3.61% in 20 years, extending their record lows, following yields of 2.69% and 3.64% yesterday, respectively.

As of Monday’s close, the triple-A muni scale in 10 years was at 77.3% of comparable Treasuries, according to MMD, and 30-year munis were 95.8% of comparable Treasuries. Thirty-year tax-exempt triple-A general obligation bonds were at 98.1% of the comparable London Interbank Offered Rate.

Elsewhere in the new-issue market yesterday, Jefferies & Co. priced $252.4 million of GO refunding bonds for Ohio in four series. Pricing information was not available by press time. The bonds were slated to mature from 2010 through 2020, and are rated Aa2 by Moody’s and AA-plus by Standard & Poor’s.

Maryland’s triple-A rated Washington Suburban Sanitary District competitively sold $180 million of consolidated public improvement bonds to Wachovia Bank NA in two series, including $90 million of taxable Build America Bonds.

 The BABs, which were won with a true interest cost of 4.86%, mature from 2020 through 2029, with yields ranging from 4.35% priced at par in 2020 to 5.10% with a 5% coupon in 2029, or 2.83% in 2020 and 3.25% in 2029 after the 35% federal subsidy. The bonds were priced to yield between 72 and 148 basis points over the comparable Treasury yield. The bonds are callable at par in 2019.

The tax-exempt $90 million series was bought with a TIC of 2.04%, and matures from 2010 through 2019. Yields range from 0.32% with a 3% coupon in 2010 to 2.60% with a 4% coupon in 2019. The bonds are not callable.

JPMorgan priced $125 million of gas project revenue bonds for Georgia’s Public Gas Partners Inc. The bonds mature from 2010 through 2019, with yields ranging from 1.67% with a 2.5% coupon in 2011 to 3.85% with a 5% coupon in 2019. Bonds maturing in 2010 were decided via sealed bid. The bonds are rated A2 by Moody’s, A-plus by Standard & Poor’s, and A by Fitch.

Merrill Lynch & Co. priced $122.5 million of bonds for Murfreesboro, Tenn., in three series. Bonds from the $40.9 million series of water and sewer system revenue and tax refunding bonds mature from 2010 through 2026, with yields ranging from 1.03% with a 5% coupon in 2011 to 3.88% with a 4% coupon in 2026. Bonds maturing in 2010 were decided via sealed bid.

Bonds from the $15 million series of electric system revenue and tax refunding bonds mature from 2010 through 2021, with yields ranging from 1.03% with a 2% coupon in 2011 to 3.48% with a 3.375% coupon in 2021. Bonds maturing in 2010 were decided via sealed bid. Bonds from the $66.6 million series of GO refunding bonds mature from 2010 through 2020, with yields ranging from 1.03% with a 5% coupon in 2011 to 3.34% with a 5% coupon in 2020. Bonds maturing in 2010 were decided via sealed bid. The bonds, which are all callable at par in 2019, are rated A1 by Moody’s and AA-minus by Standard & Poor’s.

JPMorgan priced $80.5 million of affordable housing revenue bonds for the New York State Housing Finance Agency. The bonds mature from 2010 through 2019, with term bonds in 2024, 2029, 2034, 2041, and 2045. Yields range from 0.70% priced at par in 2010 to 4.95% with a 5% coupon in 2045.

The bonds are callable at par in 2019, except for bonds maturing in 2011, which are callable at par in 2010, and bonds maturing in 2012, which are callable at par in 2011. The credit is rated Aa2 by Moody’s.

JPMorgan priced $70.8 million of higher education facilities revenue bonds for the Rhode Island Educational Building Corp. The bonds mature in 2039, yielding 4.15% with a 5% coupon. The bonds, which are callable at par in 2019, are rated Aa1 by Moody’s and AA-plus by Standard & Poor’s.

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