The municipal market was largely unchanged with a firmer tone in light secondary market trading, as several of the week's largest new issues of Build America Bonds were priced in the primary market.In the new-issue market yesterday, Barclays Capital priced $1.3 billion of bonds, including just over $1 billion of direct-pay BABs, for the University of California. The bonds mature in 2031 and 2043, and yield 6.20%, or 4.03% after the 35% federal subsidy, and 5.70%, or 3.71% after the subsidy, both priced at par. The bonds were priced to yield 195 and 145 basis points over the comparable Treasury yield. The 2031 bonds are callable at par in 2019, with a make-whole call prior to 2019 at Treasuries plus 37.5 basis points. The 2043 bonds contain a make-whole call at Treasuries plus 25 basis points.

Barclays also priced $300 million of general revenue tax-exempt bonds for the university. The tax-exempt debt matures from 2012 through 2029, with term bonds in 2034 and 2040. Yields range from 1.22% with a 4% coupon in 2012 to 5.02% with a 5% coupon in 2040. The bonds, which are callable at 101 in 2017, declining to par in 2018, are rated Aa1 by Moody's Investors Service and AA by Standard & Poor's.

Merrill Lynch & Co. priced $1.2 billion of taxable direct-pay BABs for the Texas Transportation Commission. The bonds mature in 2029 and 2039, yielding 5.37% priced at par, or 3.49% after the 35% federal subsidy, and 5.52% priced at par, or 3.59% after the subsidy, respectively. The bonds were priced to yield 105 and 120 basis points over the comparable Treasury yield. The bonds are callable at Treasuries plus 25 basis points. The credit is rated Aa1 by Moody's and AA-plus by both Standard & Poor's and Fitch Ratings.

Traders said tax-exempt yields in the secondary market were mostly flat.

"There's little activity, not a lot of selling, and right now I think we're just unchanged," a trader in New York said.

"There might be a bit of a firmer tone out there," a trader in Los Angeles said. "You might even say we're better a basis point or two in spots. But most of the attention is focused on the issues, all the BABs. There isn't much happening in the secondary."

The Treasury market showed some gains yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.51%, was quoted near the end of the session at 3.47%. The yield on the two-year note finished at 1.01%, after opening at 1.02%. And the yield on the 30-year bond, which opened at 4.35%, was quoted near the end of the session at 4.30%.

As of Tuesday's close, the triple-A muni scale in 10 years was at 83.9% comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were 104.3% of comparable Treasuries. Also, as of Tuesday's close, 30-year tax-exempt triple-A rated general obligation bonds were at 108.3% of the comparable London Interbank Offered Rate.

Elsewhere in the new-issue market, Wisconsin competitively sold nearly $425 million of bonds in two series, including $225.8 million of taxable BABs. Wachovia Bank NA won that series, at a true interest cost of 5.52%. The bonds mature from 2023 through 2030, with term bonds in 2034 and 2040. Yields range from 4.90% priced at par, or 3.19% after the 35% federal subsidy, in 2023 to 6.00% with a 5.9% coupon, or 3.84% after the subsidy, in 2040. Bonds maturing in 2024 and 2025 were not formally re-offered. The bonds, which are callable at par in 2020, are rated Aa3 by Moody's, AA by Standard & Poor's and AA-minus by Fitch.

Wisconsin also competitively sold $197.2 million of tax-exempt general obligation bonds to Merrill Lynch, at a TIC of 3.20%. The bonds mature from 2012 through 2022, with yields ranging from 1.74% with a 3% coupon in 2013 to 3.79% with a 4% coupon in 2022. Bonds maturing in 2012, 2014, 2016, and 2020 were not formally re-offered. The bonds are callable at par in 2020.

Barclays Capital priced $270 million of income tax-secured revenue refunding bonds for the District of Columbia. According to a press release from the office of district chief financial officer Natwar Gandhi, retail orders for the triple-A rated bonds totaled $333 million, 125% of the $270 million offered, prompting the district to cancel the planned second day of the sale. The 125% marked the largest percentage of retail participation in district history, according to the release. The average interest rate was 3.39% with yields ranging from a low of 1.04% in 2011 to a high of 4.41% in 2028, according to the release.

RBC Capital Markets priced $176.3 million of metro police facility lease revenue bonds for the Pima County, Ariz., Industrial Authority. The bonds mature from 2012 through 2024, with term bonds in 2026, 2028, 2031, 2039, and 2041. Yields range from 2.17% with a 3% coupon in 2012 to 5.72% with a 5.5% coupon in 2041. The bonds, which are callable at par in 2019, are rated Aa3 by Moody's and AA by Standard & Poor's.

Morgan Keegan & Co. priced $83.3 million of public facilities revenue bonds for Miami-Dade County, Fla. The bonds mature from 2010 through 2024, with term bonds in 2029, 2034, and 2039. Yields range from 1.85% with a 4% coupon in 2010 to 5.80% with a 5.75% coupon in 2039. The bonds, which are callable at par in 2019, are insured by Assured Guaranty Corp. The underlying credit is rated A1 by Moody's, A by Standard & Poor's, and A-plus by Fitch.

The South Carolina Association of Governmental Organizations competitively sold $80.2 million of certificates of participation to Citi, with a true interest cost of 0.42%. The COPs mature in March 2010 with a 1.5% coupon, and were not formally re-offered. The credit is rated Aa1 by Moody's.

Wells Fargo Brokerage Services LLC priced $54.9 million of unlimited tax adjustable-rate road bonds for Montgomery County, Tex., in two series. Bonds from the larger $34.7 million series mature in 2031 and 2032, yielding 4.96% with a 5.125% coupon and 4.98% with a 5.25% coupon, respectively. These bonds are callable at par in 2019, and are rated Aa3 by Moody's and AA by Standard & Poor's. Bonds from the smaller $20.2 million series mature in 2028, yielding 4.75%, priced at par. These bonds are callable at par in 2019, and are insured by Financial Security Assurance Inc.

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