The municipal market was slightly firmer Friday, following the Treasury market.

"You'd think bonds would be a little more expensive, with the way the Treasury is rallying, and I guess they are, about two or three basis points lower in yield, but I don't think anyone's too proud of their bonds right now," a trader in New York said. "I think people are trying to focus on getting rid of what they have and trying to put new paper in, but also realizing that if they do sell, there's not much to put yourself into. So, it's kind of working in reverse. And this Treasury market certainly isn't helping anything."

Trades reported by the Municipal Securities Rulemaking Board Friday showed gains. A dealer sold to a customer insured Indiana Health and Educational Facilities Financing Authority 5.25s of 2041 at 5.24%, one basis point lower than where they traded Thursday. A dealer bought from a customer Tennessee Energy Acquisition Corp. 5.25s of 2026 at 5.55%, down one basis point from where they traded Thursday. Bonds from an interdealer trade of insured Hillsborough County, Fla., School District 4.5s of 2025 yielded 4.63%, two basis points lower then where they were sold Thursday.

The Treasury market showed some gains Friday. The yield on the benchmark 10-year Treasury note was finished at 3.46%, after opening at 3.54%. The yield on the two-year note was quoted near the end of the session at 1.73%, after opening at 1.81%

In economic data released Friday, the University of Michigan's preliminary April consumer sentiment index reading was 63.2, compared to the final March 69.5 reading. Economists polled by IFR Markets had predicted a 68.0 reading for the index.

In the new-issue market Friday, Bear, Stearns & Co. continued selling to retail investors $2 billion of taxable general obligation bonds for Connecticut for the teachers' retirement fund. This is the fifth day of a week-long retail order period, which precedes institutional pricing next week. A $1.6 billion series of current interest bonds matures from 2014 through 2028, with a term bond in 2032. Yields range from 4.20% in 2014 to 5.20% in 2025, all priced at par.

The remaining bonds are not being offered during the retail order period. Additionally, a $400 million series of capital appreciation bonds matures from 2014 through 2025. Only bonds maturing in 2014 and 2018 were offered during the retail order period. The credit is rated Aa3 by Moody's Investors Service and AA by both Standard & Poor's and Fitch Ratings.

Banc of America Securities LLC continued a three-day retail order period on $475 million of GOs for New York City, ahead of institutional pricing tomorrow. This is the second day of the order period. The bonds mature from 2012 through 2029, with yields ranging from 3.26% with a 4% coupon in 2013 to 4.78% with a 4.75% coupon in 2029. Bonds maturing in 2012 were not formally re-offered. Bonds maturing in 2022, 2023, and from 2025 through 2028 are not being offered during the retail order period. The bonds, which are callable at par in 2018, are rated Aa3 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch.


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