The municipal market was largely unchanged yesterday.

"The market is kind of sideways," a trader in New York said. "I'm not really seeing much going on. There's not a lot trading, but what is trading is pretty much right in line with [Monday's] levels. I'd call it flat."

Trades reported by the Municipal Securities Rulemaking Board yesterday showed little movement. Bonds from an interdealer trade of insured Miami-Dade County 5s of 2037 yielded 5.27%, even with where they were sold Monday. A dealer sold to a customer New York State 5.125s of 2027 at 4.60%, even with where they traded Monday. Bonds from an interdealer trade of Ohio's Buckeye Tobacco Settlement Financing Authority 5.25s of 2047 yielded 6.65%, one basis point lower than where they were sold Monday. Bonds from an interdealer trade of Jacksonville Health Facilities Authority 5.25s of 2032 yielded 5.67%, even with where they traded Monday.

"There might be a firmer tone," a trader in Los Angeles said. "But if there is, I don't know that it's enough to move the scale. You can maybe pick up a basis point or so in some spots, but overall it's unchanged."

The Treasury market was mixed yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.72%, finished at 3.70%. The yield on the two-year note was quoted near the end of the session at 2.20% after opening at 2.17%.

In economic data released yesterday, existing home sales decreased 2.0% in March to a seasonally adjusted 4.93 million-unit rate. The sales decrease to 4.93 million compared to the 4.95 million unit pace predicted by IFR Markets' poll of economists and followed an unrevised 2.9% rise to a 5.03 million unit level in February.

A slate of economic data will is scheduled for later in the week. Tomorrow, durable goods orders for March, initial jobless claims for the week ended April 19, continuing jobless claims for the week ended April 12, and March new home sales will be released. And Friday, the final April University of Michigan consumer sentiment index is slated.

Economists polled by IFR are predicting a 0.6% rise in durable goods orders, a 0.6% increase in durable goods orders excluding transportation, 375,000 initial jobless claims, 3 million continuing jobless claims, 580,000 new home sales, and a 63.2 Michigan sentiment index.

In the new-issue market yesterday, Morgan Stanley priced $288.1 million of fixed-rate refunding bonds for the New Jersey Educational Facilities Authority. The bonds mature from 2010 through 2028, with a term bond in 2035. Yields range from 2.35% with a 4% coupon in 2010 to 4.74% with a 5% coupon in 2035. The bonds, which are callable at par in 2018, are insured by Financial Security Assurance Inc. The underlying credit is rated Aa3 by Moody's Investors Service and A by Standard & Poor's.

Merrill Lynch & Co. priced $227.2 million of revenue bonds for the Arizona Health Facilities Authority. The bonds mature from 2009 through 2018, with term bonds in 2022, 2026, 2028, 2031, and 2035. Yields range from 2.70% with a 3.25% coupon in 2009 to 5.18% with a 5% coupon in 2036. The bonds, which are callable at par in 2018, are rated AA-minus by both Standard & Poor's and Fitch Ratings.

Goldman, Sachs & Co. priced $222.1 million of electric system revenue bonds for Chattanooga, Tenn. The bonds mature from 2013 through 2029, with a term bond in 2033. Yields range from 3.05% with a 3% coupon in 2013 to 4.70% with a 5% coupon in 2033. The bonds, which are callable at par in 2018, are rated AA by both Standard & Poor's and Fitch.

Citi priced $205 million of tobacco bonds for Puerto Rico. The deal includes turbo bonds and maturities going out through 2058. Pricing information was not available by press time. Officials postponed the deal in late July due to a hike in interest rates.

Citi also priced $121.1 million of tax-exempt and taxable certificates of participation for California's Kern County Water Agency. Certificates of participation from an $84.5 million tax-exempt series mature from 2009 through 2024, with term maturities in 2028, 2033, and 2038. They are callable at par in 2018. Yields range from 2.25% with a 3% coupon in 2009 to 5.00% at par in 2038.

The deal also contains a $36.6 million taxable component, which matures in 2013, 2018, and 2038. The 2009 through 2011 tax-exempt maturities are uninsured, while all remaining maturities in both the tax-exempt and taxable portions are insured by Assured Guaranty Corp. The underlying credit is rated A1 by Moody's and A by Standard & Poor's.

Lehman Brothers priced $91 million of general revenue refunding bonds for the University of Washington. The bonds mature from 2008 through 2028, with a term bond in 2036. Yields range from 2.20% with a 3% coupon in 2008 to 4.88% with a 4.75% coupon in 2036. The bonds, which are callable at par in 2017, are rated Aa1 by Moody's and AA-plus by Standard & Poor's.

Banc of America Securities LLC priced $66.7 million of fixed-rate revenue refunding bonds for the Massachusetts Development Finance Agency. The bonds mature from 2009 through 2026, with yields ranging from 2.00% with a 4% coupon in 2009 to 4.43% with a 5% coupon in 2026. The bonds, which are callable at par in 2018, are rated Aa3 by Moody's and AA-minus by Standard & Poor's.

Meanwhile, Connecticut Treasurer Denise Nappier announced yesterday that last week's $2.2 taxable state GO pension borrowing was massively oversubscribed, with more than $4 billion of orders coming in. It was the largest bond offering in the state's history.

 

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