The municipal market was flat to slightly firmer as Ohio’s American Municipal Power Inc. came to market with $470.7 million of taxable debt, including $386.6 million of Build America Bonds.

Merrill, Lynch & Co. priced the $470.7 million of revenue bonds for AMP in two series. The $386.6 million BAB series contains two maturities in 2034, and also matures in 2039 and 2043, yielding 6.453%, 5.953%, 6.553%, and 6.053%, respectively, all priced at par. After the 35% federal subsidy, they yield 4.19%, 3.87%, 4.26%, and 3.93%, respectively.

The bonds were priced to yield between 190 and 250 basis points over the comparable Treasury yield. All bonds are subject to a make-whole call at Treasuries plus 30 basis points. The 6.453% coupon bonds in 2034 and 2039 bonds are also subject to an optional par call in 2020.

The deal also contains an $84.1 million taxable series, which matures from 2013 through 2019, with term bonds in 2024 and 2028. Yields range from 3.62% in 2013 to 5.80% in 2028.

The bonds were priced to yield between 130 and 205 basis points over the comparable Treasury yield, and have a make-whole call at Treasuries plus 30 basis points. The credit is rated A1 by Moody’s Investors Service and A by both Standard & Poor’s and Fitch Ratings.

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

“There isn’t a ton of movement out there, but the tone is still firmer,” a trader in New York said. “Inside of 20 years though, it’s pretty flat. I’m not really seeing much of a bump with the shorter stuff. If you go out long though, you can pick up a couple basis points. Overall, we’re maybe one better, maybe two in spots, if we’re seeing any movement at all.”

The Treasury market showed gains yesterday. The yield on the benchmark 10-year note, which opened at 3.30%, was quoted near the end of the session at 3.19%. The yield on the two-year note was quoted near the end of the session at 0.88% after opening at 0.94%. The yield on the 30-year bond, which opened at 4.05%, was quoted near the end of the session at 3.96%.

The Municipal Market Data triple-A scale yesterday yielded 2.57% in 10 years and 3.44% in 20 years, matching and extending their record lows, respectively, following respective yields of 2.57% and 3.47% on Wednesday.

As of Wednesday’s close, the triple-A muni scale in 10 years was at 77.6% of comparable Treasuries, according to MMD, while 30-year munis were 95.6% of comparable Treasuries. Thirty-year tax-exempt triple-A general obligation bonds were at 99.2% of the comparable London Interbank Offered Rate as of Wednesday’s close.

Elsewhere in the new-issue market yesterday, the Florida State Board of Education competitively sold $186.6 million of taxable and tax-exempt bonds in two series, including $147.8 million of Build America Bonds.

The BAB series was sold to Merrill with a true interest cost of 5.57%. The bonds mature from 2020 through 2026, with term bonds in 2030 and 2039. Yields range from 4.75% priced at par in 2022 to 5.75% priced at par in 2039, or from 3.08% in 2022 to 3.74% in 2039 after the 35% ­federal subsidy.

Bonds maturing in 2020, 2021, 2023, and 2024 were not re-offered. 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.

The $38.8 million tax-exempt series was sold to UBS Financial Services with a true interest cost of 2.44%, and matures from 2010 through 2019, with yields ranging from 1.55% with a 3% coupon in 2013 to 2.58% with a 3% coupon in 2017. Bonds maturing from 2010 through 2012 and in 2018 and 2019 were not formally re-offered. The bonds are not callable.

Morgan Stanley priced $95.1 million of pollution control revenue bonds for the Pima County, Ariz., Industrial Development Authority in two series. Bonds from the $80.4 million Series A mature in 2020 and were priced at par to yield 4.95%; they are not callable.

Bonds from the $14.7 million series mature in 2032 and were priced at par to yield 5.125%. They are callable at par in 2019. The credit is rated Baa3 by Moody’s, BBB-minus by Standard & Poor’s, and BB-plus by Fitch.

In economic data released yesterday, initial jobless claims for the week ended Sept. 26 came in at 551,000 after a revised 534,000 the previous week. Economists polled by Thomson Reuters had predicted 535,000 initial jobless claims.

Construction spending increased 0.8% in August after a 1.1% drop the previous month. Economists polled by Thomson had predicted a 0.2% decline.

The Institute for Supply Management’s business activity composite index dipped to 52.6 in September from 52.9 in August. Economists polled by Thomson Reuters predicted the index would rise to 54.0.

Pending home sales increased 6.4% to a reading of 103.8 in August from an unrevised 3.2% rise to 97.6 in August. Thomsons’ poll of economists had predicted a 98.6 reading.

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