The municipal market again finished slightly firmer yesterday. Traders said tax-exempt yields were lower by one or two basis points."It's fairly quiet, but we're doing a bit better," a trader in New York said. "The market has definitely had a better feel to it the last couple of days. I'd call it better by maybe a basis point or two, a little more so out on the longer end."
In the new-issue market yesterday, Merrill Lynch & Co. priced $281.2 million of grant anticipation Build America Bonds for the Michigan Department of Transportation. The bonds mature mostly in 2027, with a 2012 maturity worth $5 million, yielding 4.75% priced at par in 2012, or 3.09% after the 35% federal subsidy, and 7.69% with a 7.625% coupon in 2027, or 5.00% after the subsidy, respectively. Bonds maturing in 2027 were priced to yield 325 basis points over the comparable U.S. Treasury yield. The bonds are callable at par in 2018, and are rated Aa3 by Moody's Investors Service and AA by Standard & Poor's.