The municipal market was slightly firmer yesterday, as the primary market digested its heaviest slate of long-term supply of the week, with issuers in Massachusetts, Florida, and Puerto Rico coming to market with $1.5 billion of bonds in three transactions.

"It's nice to see some supply back out there, we definitely needed some," a trader in New York said. "We're doing a bit better on the whole, and there was definitely some strong pricing on some of the new issues. There's a demand out there now, people are back from vacation, and I think people are ready to get going."

In the new-issue market yesterday, Citi priced $658 million of general obligation bonds for Massachusetts. The bonds mature from 2009 through 2028, with term bonds in 2033 and 2038. Yields range from 2.07% with a 3% coupon in 2010 to 4.77% with a 5% coupon in 2038. The bonds, which are callable at par in 2018, are rated Aa2 by Moody's Investors Service and AA by both Standard & Poor's and Fitch Ratings.

Merrill Lynch & Co. priced $584.3 million of tax-exempt and taxable revenue bonds for the Florida Municipal Power Agency. Bonds from the $509.6 million tax-exempt series A mature from 2009 through 2028, with term bonds in 2031. Yields range from 2.03% with a 3% coupon in 2009 to 5.31% with a 5% coupon in 2031. The bonds are callable at par in 2018, except those bonds maturing in 2019, which are not callable. The deal also contains a $74.7 million taxable component. Those bonds mature from 2010 through 2013 and in 2016. The credit is rated A1 by Moody's and A-plus by Fitch.

Morgan Stanley priced $250 million of general obligation public improvement bonds for Puerto Rico. The bonds mature from 2010 through 2018, with term bonds in 2023, 2028, 2033, and 2038. Yields range from 3.40% with a 5% coupon in 2010 to 5.49% with a 6% coupon in 2038. All yields were lowered by two basis points at re-pricing, except those maturing in 2023 and 2038, which were unchanged and lowered by three basis points, respectively. The bonds, which are callable at par in 2018, are rated Baa3 by Moody's and BBB-minus by Standard & Poor's.

Trades reported by the Municipal Securities Rulemaking Board yesterday showed some gains. Bonds from an interdealer trade of New York City 5.25s of 2027 yielded 4.70%, down two basis points from where they were sold Wednesday. A dealer bought from a customer California 5s of 2027 at 4.84%, one basis point lower than where they traded Wednesday. A dealer sold to a customer Financial Security Assurance Inc.-backed New York Metropolitan Transportation Authority 4.5s of 2032 at 4.94%, down one basis point from where they traded Wednesday.

"We're seeing a bit of firmness," a second trader in New York said. "I don't think that we're more than a basis point or two better, but Treasuries are doing better, and there's a noticeable firmer tone in munis."

The Treasury market showed some gains yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.70%, finished at 3.63%. The yield on the two-year note was quoted near the end of the session at 2.18% after opening at 2.26%. The yield on the 30-year Treasury was quoted near the end of the session at 4.27% after opening at 4.32%.

In economic data released yesterday, initial jobless claims for the week ended Aug. 30 came in at 444,000, after a revised 429,000 the previous week. Economists polled by IFR Markets had predicted 420,000 initial jobless claims.

Continuing jobless claims for the week ended Aug. 23 came in at 3.435 million, after a revised 3.429 million the previous week. Economists polled by IFR Markets had predicted 3.425 million continuing jobless claims.

Also, the Institute for Supply Management's non-manufacturing business activity composite index was 50.6 in August, up from 49.5 in July. Economists polled by IFR had expected a 50.0 level.

Today, the August non-farm payrolls report will be released. Economists polled by IFR are predicting a 75,000 loss in non-farm payrolls.

Elsewhere in the new-issue market, Merrill Lynch priced $198.6 million of state contract bonds for the New Jersey Sports and Exposition Authority. The bonds mature from 2009 through 2024, with yields ranging from 1.90% with a 3% coupon in 2009 to 4.70% with a 4.5% coupon in 2024. The bonds, which are callable at par in 2018, are rated A2 by Moody's, AA-minus by Standard & Poor's, and A-plus by Fitch.

Citi priced $141.6 million of refunding lease revenue bonds for California's San Mateo County Joint Powers Financing Authority. The bonds mature from 2009 through 2025, with term bonds in 2028, 2033, and 2036. Yields range from 1.93% with a 3% coupon in 2010 to 5.12% with a 5% coupon in 2036. The bonds, which are callable at par in 2018, are rated Aa3 by Moody's and AA by Standard & Poor's.

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