The municipal market was unchanged to slightly weaker yesterday, as the Metropolitan Government of Nashville and Davidson County sold nearly $600 million of debt.

“It’s kind of a quiet start here. We’re just working on money that got redeemed on June 1, putting redemption money back to work. But it’s been quiet,” a trader in New York said. “People are not looking to extend themselves too far out from the yield curve. 2027 to 2028 and shorter is what most people are looking for.”

“But secondary trading is very, very quiet,” the trader said. “You’d think it should have been busier than what it is, June being a big rollover month with fresh cash out there. But the Treasury market should trade off some more, and yields will get a little bit cheaper out here for the buyers to come back in here.”

“The market is fairly steady. There is some activity as we go deeper into the week,” a trader in Los Angeles said. “Treasuries are down, but we are stable. Tomorrow is the first Friday of an unofficial summer, so it may be a quiet day as we wind down to the latter part of the day. Next week, there is more new supply, which will hopefully get us a better read.”

In the new-issue market yesterday, Goldman, Sachs & Co. priced $598.1 million of bonds for Nashville and Davidson County in three series, including more than $300 million of taxable Build America Bonds.

Bonds from the $252.0 million series of taxable BABs mature in 2034, yielding 5.701% priced at par, or 3.71% after the 35% federal subsidy. They were priced to yield 145 basis points over the comparable Treasury yield.

Bonds from the $51.5 million series of taxable BABs mature from 2013 through 2015, with yields ranging from 2.208% in 2013, or 1.43% after the 35% federal subsidy, to 3.23% in 2015, or 2.10% after the subsidy, all priced at par. They were priced to yield from 75 to 110 basis points over the comparable Treasury yield.

Bonds from the $294.6 million series of tax-exempt general obligation improvement and refunding bonds mature from 2015 through 2026, with yields ranging from 1.84% with a 3% coupon in 2015 to 4.00% with a 3.75% coupon in 2026. The bonds are callable at par in 2020.

The credit is rated Aa1 by Moody’s Investors Service and AA by Standard & Poor’s.

The Treasury market showed losses yesterday. The benchmark 10-year Treasury note was quoted near the end of the session at 3.38% after opening at 3.36%.

The 30-year Treasury bond was quoted near the end of the session at 4.29% after opening at 4.27%. The two-year Treasury note was quoted near the end of the session at 0.83% after opening at 0.81%.

The Municipal Market Data triple-A scale yielded 2.82% in 10 years and 3.67% in 20 years yesterday, following levels of 2.79% and 3.65% on Wednesday. The scale yielded 4.01% in 30 years yesterday, versus Wednesday’s 3.99% .

Wednesday’s triple-A muni scale in 10 years was at 83.5% of comparable Treasuries and 30-year munis were at 94.1%, according to MMD, while 30-year tax-exempt triple-A GOs were at 98.0% of the comparable London Interbank Offered Rate.

Elsewhere in the new-issue market yesterday, Morgan Stanley priced $297.6 million of refunding revenue bonds for the California Health Facilities Financing Authority in two series.

Bonds from the $151.0 million Series A mature from 2011 through 2021, with term bonds in 2025 and 2031. Yields range from 1.05% with a 4% coupon in 2011 to 4.85% with a 5.25% coupon in 2031. The bonds are callable at par in 2020.

Bonds from the $146.6 million Series B contain a split maturity in 2025 and also mature in 2031 and 2036. Yields range from 4.60% with a 4.5% coupon in 2025 to 5.05% with a 5% coupon in 2036. The bonds are callable at par in 2020. The credit is rated Aa3 by Moody’s, A-plus by Standard & Poor’s, and AA-minus by Fitch Ratings.

Fresno, Calif., competitively sold $86 million of tax and revenue anticipation notes to Wells Fargo Securities, at a true interest cost of 0.38%.

The Trans mature in 2011 with a 2% coupon and were not formally re-offered. The credit is rated SP-1-plus by Standard & Poor’s.

Morgan Keegan & Co. priced $81.6 million of student housing revenue bonds for Bowling Green, Ohio.

The bonds mature in 2012, 2016, 2017, 2019, 2020, 2031, and 2045. Yields range from 2.48% with a 3% coupon in 2012 to 6.125% with a 6% coupon in 2045. The bonds, which are callable at par in 2020, are rated BBB-minus Standard & Poor’s.

In economic data released yesterday, initial jobless claims fell to 453,000 for the week ending May 29.

Economists expected 450,000 initial claims, according to the median estimate from Thomson Reuters.

Nonfarm productivity increased 2.8% in the first quarter, revised lower from the 3.6% gain reported in the preliminary estimate released in May.

Unit labor costs fell 1.3% for the quarter, a smaller decline than the 1.6% drop reported in the preliminary estimate last month.

Economists expected productivity to be revised to a 3.4% gain and for unit labor costs to be revised to a 1.4% drop, according to the median estimate from Thomson Reuters.

Priti Patnaik contributed to this column.

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