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.

Final pricing information was released on Tuesday's $1 billion Dallas Area Rapid Transit revenue bond sale, which contained $830 million of BABs. The deal was priced by Siebert Brandford Shank & Co. in two series.

Bonds from the $830 million series of taxable BABs mature in 2034 and 2044, yielding 6.25% and 6.00%, respectively, or 4.06% and 3.90% respectively after the 35% federal subsidy. The bonds were priced to yield 175 and 150 basis points over the comparable Treasury yields, respectively. Bonds maturing in 2034 are callable at par in 2019, and contain an optional make-whole redemption at Treasury plus 25 basis points prior to June 2019. Bonds maturing in 2044 contain a make-whole call at Treasury plus 25 basis points.

Bonds from the $170.4 million tax-exempt series mature from 2014 through 2022, with yields ranging from 2.82% with a 4% coupon in 2014 to 4.25% with a 5% coupon in 2022. The bonds are callable at par in 2019. The credit is rated Aa3 by Moody's and AAA by Standard & Poor's.

Elsewhere in the new-issue market yesterday, JPMorgan priced for retail investors $203 million of multifamily housing revenue bonds for the New York City Housing Development Corp. Bonds from the $118.2 million Series C-1 mature from 2012 through 2019, with term bonds in 2024, 2029, 2034, 2039, and 2046. Yields range from 2.50% in 2012 to 5.60% in 2039, all priced at par. Bonds maturing in 2046 were not offered during the retail order period. The bonds are callable at par in 2019.

Bonds from the $84.8 million Series C-2 mature from 2011 through 2013, yielding 2.30%, 2.50%, and 3.625%, respectively, all priced at par. Bonds maturing in 2011 and 2012 are not callable, while bonds maturing in 2013 are callable at par in 2011. The credit is rated Aa2 by Moody's and AA by Standard & Poor's.

JPMorgan also priced $200 million of revenue bonds for the Illinois Finance Authority. The bonds mature in 2034, yielding 8.00% with a 7.75% coupon in 2034. The bonds, which are callable at par in 2019, are rated Baa1 by Moody's and BBB-plus by Standard & Poor's,

Goldman, Sachs & Co. priced $172.4 million of refunding revenue bonds for Texas' Lower Colorado River Authority. The bonds mature from 2010 through 2024, with term bonds in 2029, 2033, and 2039. Yields range from 1.25% with a 3% coupon in 2010 to 5.72% with a 5.625% coupon in 2039. The bonds, which are callable at par in 2019, are rated A1 by Moody's, A by Standard & Poor's, and A-plus by Fitch Ratings.

Goldman Sachs also priced a second transaction for the Lower Colorado River Authority, worth $117 million. The bonds mature from 2016 through 2024, with term bonds in 2029 and 2036. Yields range from 3.85% with a 3.75% coupon in 2016 to 5.68% with a 5.5% coupon in 2036. These bonds are callable at par in 2019.

Fulton County, Ga., competitively sold $120 million of tax anticipation notes to Barclays Capital, with a net interest cost of 0.32%. The Tans mature in December, with a 1% coupon. The credit is rated MIG-1 by Moody's, SP-1-plus by Standard & Poor's, and F1-plus by Fitch.

Merrill Lynch priced $87.7 million of health facilities revenue bonds for the Brevard County, Fla., Health Facilities Authority. The bonds mature in 2033 and 2039, yielding 7.02% and 7.10%, respectively, both with 7% coupons. The bonds, which are callable at par in 2019, are rated A3 by Moody's and A-minus by Standard & Poor's.

The Treasury market showed some losses yesterday, after earlier gains. The yield on the benchmark 10-year note, which opened at 3.66%, finished at 3.68%. The yield on the two-year note finished at 1.16% after opening at 1.18%. The yield on the 30-year bond, which opened at 4.48%, finished at 4.51%.

Standard & Poor's released a report indicating that the U.S. government's long-term triple-A rating is unlikely to be lowered in the near future.

As of Tuesday's close, the triple-A muni scale in 10 years was at 90.7% of comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were 104.7% of comparable Treasuries. Also, as of the close Tuesday, 30-year tax-exempt triple-A rated general obligation bonds were at 111.6% of the comparable London Interbank Offered Rate.

In economic data released yesterday, the consumer price index climbed 0.1% in May, after no change the previous month. Economists polled by Thomson Reuters had predicted a 0.3% increase. The core CPI rose 0.1% in May, after a 0.3% uptick the previous month. Economists polled by Thomson had predicted a 0.1% climb.

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