The municipal market was slightly firmer yesterday, as Pennsylvania came to market with $405 million of general obligation bonds.

"Munis we're firmer a few basis points, and we saw some solid demand for bonds throughout the session," a trader in Los Angeles said.

"We're doing a bit better," a trader in New York added. "The Treasury market is up some, and overall, munis are better by about two or three basis points."

The Treasury market showed gains yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.84%, finished at 3.78%. The yield on the two-year note was quoted near the end of the session at 2.32%, after opening at 2.40%.

In the new-issue market, Pennsylvania competitively sold $405 million of GOs to Merrill Lynch & Co. in two series at a true interest cost of 4.11%. Bonds from the larger $325 million series mature from 2009 through 2028, with yields ranging from 2.90% with a 5% coupon in 2012 to 4.49% with a 4.375% coupon in 2028. Bonds maturing from 2009 through 2011, from 2016 through 2020, and from 2022 through 2027 were not formally re-offered. These bonds are callable at par in 2018. Bonds from the smaller $80 million series mature from 2008 through 2013, with yields ranging from 2.00% with a 4% coupon in 2008 to 3.02% with a 4% coupon in 2013. These bonds are not callable. The credit is rated Aa2 by Moody's Investors Service and AA by Fitch Ratings.

San Francisco competitively sold $234.3 million of GO refunding bonds to Lehman Brothers with a TIC of 2.99%. The bonds mature from 2009 through 2021, with yields ranging from 2.66% with a 5% coupon in 2011 to 3.97% with a 4% coupon in 2021. The bonds, which are callable at par in 2015, are rated Aa3 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch.

New Mexico competitively sold $149 million of severance tax bonds to Lehman with a TIC of 3.57%. The bonds mature from 2009 through 2018, with yields ranging from 2.35% with a 5% coupon in 2010 to 3.86% with a 4% coupon in 2018. The bonds, which are callable at par in 2013, are rated Aa2 by Moody's and AA by Standard & Poor's.

The Miami-Dade County School Board competitively sold $150 million of revenue anticipation notes to Citi, with a net interest cost of 1.90%. The Rans mature in Jan. 2009, yielding 1.89% with a 2.5% coupon. The notes are rated MIG-1 by Moody's.

Banc of America Securities LLC priced $144.8 million of mortgage revenue bonds for North Carolina's Johnston Memorial Hospital Authority. The bonds mature from 2011 through 2018, with term bonds in 2020, 2024, 2028, and 2036. Yields range from 3.07% with a 4% coupon in 2011 to 4.93% with a 5.25% coupon in 2036. The bonds, which are callable at par in 2018, are insured by Financial Security Assurance Inc.

JPMorgan priced $167.4 million of revenue bonds for the Shelby County, Tenn., Health, Educational and Housing Facility Board in three series. Bonds from the $77.3 million Series A mature from 2016 through 2021, with term bonds in 2023 and 2037. Yields range from 3.89% with a 5% coupon in 2016 to 4.71% with a 5.25% coupon in 2027. These bonds are callable at par in 2018. Bonds from the $77.3 million Series B also mature from 2016 through 2021, with term bonds in 2023 and 2037. Yields range from 3.89% with a 5% coupon in 2016 to 4.71% with a 5.25% coupon in 2027. The bonds are callable at par in 2018.

Bonds from the $12.8 million Series C mature from 2008 through 2014, with yields ranging from 2.30% with a 4% coupon in 2009 to 3.60% with a 4% coupon in 2014. Bonds maturing in 2008 will be decided via sealed bid. These bonds are not callable. All bonds are insured by FSA. The underlying credit is rated A2 by Moody's and A by Standard & Poor's

UBS Securities LLC priced $104.2 million of tax-exempt and taxable GOs for Maine. Bonds from a $98.3 million tax-exempt series of general purpose bonds mature from 2009 through 2018, with yields ranging from 2.35% with a 3% coupon in 2010 to 3.70% with a 5% coupon in 2018. Bonds maturing in 2009 were not formally re-offered. These bonds are not callable. The deal also contains a $5.9 million taxable series, which matures from 2009 through 2018. The credit is rated Aa3 by Moody's and AA by Standard & Poor's and Fitch.

In economic data released yesterday, the producer price index rose 0.2% in April after a 1.1% gain in March. Economists polled by IFR Markets had predicted a 0.4% increase.

Also, the PPI core climbed 0.4% in April after a 0.2% uptick the previous month. Economists polled by IFR had predicted 0.2% growth.

Later this week, more economic data will be released. Tomorrow, initial jobless claims for the week ended May 17 and continuing jobless claims for the week ended May 10 will be released. On Friday, April existing home sales will be released.

Economists polled by IFR Markets are predicting 370,000 initial jobless claims, 3.065 million continuing jobless claims, and 4.850 million existing home sales.

 

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