The municipal market was slightly firmer yesterday, as the Dallas County Hospital District came to market with close to $700 million of taxable Build America Bonds.In the new-issue market, Merrill Lynch & Co. priced $680.2 million of taxable BABs for the district in two series. Bonds from the $217.5 million series mature from 2020 through 2025, with a term bond in 2034. Yields range from 4.95% in 2020, or 3.22% after the 35% federal subsidy, to 6.17% in 2034, or 4.01% after the subsidy.

All bonds are priced at par. The bonds were priced to yield between 150 and 220 basis points over the comparable Treasury yields. The bonds are callable at par in 2019.

Bonds from the $462.7 million series mature from 2017 through 2026, with term bonds in 2029 and 2044. Yields range from 4.15% in 2017, or 2.70% after the 35% federal subsidy, to 5.62% in 2044, or 3.65% after the subsidy. All bonds are priced at par.

The bonds were priced to yield between 70 and 185 basis points over the comparable Treasury yields. The bonds are subject to a make-whole call. The credit is rated AAA by both Standard & Poor's and Fitch Ratings.

Traders said tax-exempt yields in the secondary market were lower by one or two basis points.

"There were some bits and pieces trading, some business getting done," a trader in New York said. "We definitely picked up a few basis points, mostly out on the long end. There seemed to be more business getting done out there than elsewhere on the curve. There's interest out there, more so than the short end particularly."

"There isn't a ton of activity, but it's not exactly dead," a trader in Los Angeles said. "We're probably better a good basis point or two, maybe even closer to three on the long end."

The Treasury market was mixed yesterday. The yield on the benchmark 10-year note, which opened at 3.44%, finished at 3.45%. The yield on the two-year note finished at 1.07% after opening at 1.06%. The yield on the 30-year bond, which opened at 4.22%, finished at 4.20%.

As of Tuesday's close, the triple-A muni scale in 10 years was at 85.5% comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were 106.8% of comparable Treasuries. As of Tuesday's close, 30-year tax-exempt triple-A general obligation bonds were at 109.9% of the comparable London Interbank Offered Rate.

Elsewhere in the new-issue market yesterday, the Florida State Board of Education competitively sold $165.8 million of public education capital outlay refunding bonds to JPMorgan, with a true interest cost of 3.48%. The bonds mature from 2010 through 2024.

None of the bonds were formally re-offered. Bonds maturing in 2010 were decided via sealed bid. The bonds, which are callable at 101 in 2019, declining to par in 2020, are rated Aa1 by Moody's Investors Service, AAA by Standard & Poor's, and AA-plus by Fitch.

JPMorgan priced $165 million of tax-exempt and taxable bonds for the Indianapolis Local Public Improvement Bond Bank. Bonds from the $144.9 million tax-exempt Series B mature from 2015 through 2020, with yields ranging from 2.65% with a 3% coupon in 2015 to 3.67% with a 5% coupon in 2020. The bonds are callable at par in 2019.

Bonds from the $20.2 million taxable Series C mature from 2011 through 2015, with yields ranging from 1.79% in 2011 to 3.80% in 2015, all priced at par. The bonds were priced to yield between 80 and 135 basis points over the comparable Treasury yields. The credit is rated Aa3 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch.

Merrill Lynch priced $161 million of revenue bonds for the Wisconsin Health and Educational Facilities Authority in two series. Bonds from the $26.2 million Series A mature from 2010 through 2020, with yields ranging from 2.28% with a 2% coupon in 2010 to 5.24% with a 5% coupon in 2020. Bonds from the $133.8 million Series B mature in 2025 and 2027, yielding 4.75% and 5.13%, respectively, both priced at par. The credit is rated A3 by Moody's and A by Fitch.

JPMorgan also priced for retail investors $65 million of bonds for Austin in three series. Bonds from the $38.7 million series mature from 2010 through 2018, with yields ranging from 0.91% with a 3% coupon in 2011 to 3.06% with a 5% coupon in 2018. Bonds maturing in 2010 were decided via sealed bid. Bonds from a $12.5 million series mature from 2010 through 2029, with term bonds in 2034 and 2039.

Yields range from 0.91% with a 3% coupon in 2011 to 4.80% with a 4.75% coupon in 2039. Bonds maturing in 2010 were decided via sealed bid. The bonds, which are callable at par in 2019, are rated Aa1 by Moody's, AAA by Standard & Poor's, and AA-plus by Fitch.

JPMorgan also took indications of interest on a $69 million sale of direct subsidy BABs for Austin, which will be priced today alongside the tax-exempt debt. The bonds will mature in 2024 and 2029.

Merrill Lynch priced $40.5 million of direct subsidy BABs for Orlando, Fla. The bonds mature in 2029 and 2039, yielding 6.85% and 7.10%, respectively, or 4.45% and 4.62% respectively after the 35% federal subsidy. The bonds were priced to yield 263 and 288 basis points of the comparable Treasury yield. The bonds, which are callable at par in 2019, are rated Aa3 by Moody's, AA-minus by Standard & Poor's, and AA by Fitch.

In economic data released yesterday, durable goods orders rose 4.9% in July, after a revised 1.3% decline the previous month. Economists polled by Thomson Reuters had predicted a 3.0% gain.

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