Municipals moved sideways yesterday in light to moderate trading activity while underwriters priced over $800 million in deals."We're pretty flat," a trader in New York said. "There's a bit of activity in the secondary, not a ton, but certainly more than [Monday]. But I'm just not seeing a whole lot of movement. So, it's fairly quiet, but no real movement in either direction, just pretty flat."

"There's not too much going on," a trader in Los Angeles said. "There's some trading going on, but not too much. We're just pretty flat. Not really sensing a tone, positive or negative. Just a pretty unchanged day."

The Treasury market was mixed. The yield on the benchmark 10-year note, which opened at 3.72%, was quoted near the end of the session at 3.69%. The yield on the two-year note was quoted near the end of the session at 1.09% after opening at 1.03%. The yield on the 30-year bond, which opened at 4.62%, was quoted near the end of the session at 4.55%.

As of Monday's close, the triple-A muni scale in 10 years was at 81.5% of comparable Treasuries, according to Municipal Market Data. Thirty-year munis were 102.2% of comparable Treasuries. As of Monday's close, 30-year tax-exempt triple-A general obligation bonds were at 107.8% of the comparable London Interbank Offered Rate.

In the new-issue market yesterday, Merrill Lynch & Co. priced $257.4 million of state revolving fund revenue bonds for the Texas Water Development Board in two series. Bonds from the $224.6 million Series A-1 mature from 2011 through 2029, with yields ranging from 0.90% with a 3% coupon in 2011 to 4.50% with a 5% coupon in 2029. The bonds are callable at par in 2019.

Bonds from the $32.8 million Series A-2 mature from 2010 through 2017, with yields ranging from 0.90% with a 3% coupon in 2011 to 2.81% with a 5% coupon in 2017. Bonds maturing in 2010 were decided via sealed bid. The bonds are not callable, and are rated triple-A by all three major ratings agencies.

Merrill Lynch also priced $234.9 million of GO refunding bonds for Philadelphia. The bonds mature from 2019 through 2031, with yields ranging from 4.50% with a 4.25% coupon in 2019 to 5.50% with a 5.45% coupon in 2031. The bonds, which are callable at par in 2019, are insured by Assured Guaranty Corp. The underlying credit is rated Baa1 by Moody's Investors Service, BBB by Standard & Poor's, and BBB-plus by Fitch Ratings.

JPMorgan priced for retail investors $202.7 million of state revolving fund revenue bonds for the Massachusetts Water Pollution Abatement Trust, ahead of institutional pricing today. The bonds mature from 2010 through 2029, with yields ranging from 0.76% with a 3% coupon in 2011 to 4.27% with a 4.2% coupon in 2029. The bonds, which are callable at par in 2019, are rated triple-A by all three agencies.

Cobb County, Ga., competitively sold $126.6 million of water and sewerage improvement revenue bonds to Merrill with a TIC of 3.74%.

The bonds mature from 2010 through 2029, with yields ranging from 0.94% with a 4% coupon in 2012 to 4.33% with a 4.25% coupon in 2029. Bonds maturing in 2010, 2011, 2013, 2014, 2024, 2026, and 2029 were not formally re-offered. The bonds, which are callable at par in 2019, are rated triple-A by all three rating agencies.

Merrill Lynch priced $116.5 million of revenue bonds for the Washington Health Care Facilities Authority. The bonds mature from 2010 through 2019, with term bonds in 2024, 2029, 2031, and 2039. Yields range from 3.65% with a 5% coupon in 2010 to 7.17% with a 7% coupon in 2039. The bonds, which are callable at par in 2019, are rated Baa2 by Moody's and BBB-plus by Fitch.

JPMorgan also priced for retail investors $87.9 million of GOs for the Oakland Unified School District. The tax-exempt Series A GO bonds are part of a two-series deal to be priced for institutions today that also contains $70.8 million of Series B taxable Build America Bonds, which are set to mature in 2034 and will be callable at par in 2019.

The Series A bonds, which were priced for retail yesterday, mature from 2013 through 2024, with a term bond in 2029. Yields range from 3.43% with a 4% coupon in 2013 to 6.34% with a 6.25% coupon in 2029. The bonds, which are callable at par in 2019, are rated Baa1 by Moody's and BBB-plus by Standard & Poor's.

Morgan Keegan & Co. priced $67 million of revenue refunding bonds for the Louisiana Local Government Environmental Facilities and Community Development Authority in two series. Bonds from the $63.9 million Series A mature from 2010 through 2024, with term bonds in 2026 and 2031. Yields range from 1.82% with a 3% coupon in 2011 to 5.48% with a 5.375% coupon in 2031.

Bonds maturing in 2010 were decided via sealed bid. Bonds from the $3.1 million Series B mature from 2010 through 2024, with a term bond in 2029. Yields range from 1.00% with a 3% coupon in 2010 to 5.32% with a 5.125% coupon in 2029. All the bonds, which are callable at par in 2019, are rated Aa3 by Moody's and AA-minus by Standard & Poor's.

In economic data released yesterday, the consumer confidence index dropped to 46.6 from an unrevised 49.3 last month. Economists polled by Thomson Reuters predicted the index would dip to 49.0.

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