The municipal market was unchanged to slightly weaker yesterday.

"We're seeing weakness in spots, but there's not a whole lot going on," a trader in New York said. "I'd say, with longer-term paper, you might see bonds weaker a basis point or two. But inside of 15 or 20 years, it's probably unchanged."

The Treasury market showed losses. The yield on the benchmark 10-year Treasury note, which opened at 3.61%, finished at 3.69%. The yield on the two-year note was quoted near the end of the session at 1.98% after opening at 1.86%.

In economic data released yesterday, housing starts fell to 947,000 units in March after a revised 984,000 units in February. Economists polled by IFR Markets had expected starts to decline at a 1.018 million rate.

Building permits fell to 927,000 in March, following a revised 984,000 the month before. Economists polled by IFR had expected permits to fall to a 965,000 rate.

The consumer price index rose 0.3% while the core CPI rate increased 0.2%. This follows no change to the either the CPI or the core CPI the previous month. Both the CPI rise and the core rate gain matched the expectations of economists polled by IFR.

Industrial production rose 0.3% last month following a revised 0.7% drop in February. Economists polled by IFR Markets had predicted production would dip 0.1%.

Capacity utilization climbed to 80.5% in March after a revised 80.3% level in February. Economists polled by IFR had expected capacity use to fall to 80.3%.

In the new-issue market yesterday, Bear, Stearns & Co. priced $2.3 billion of taxable general obligation bonds for Connecticut's retirement fund. A $2.1 billion series of current interest bonds matures from 2014 through 2028, with a term bond in 2032. Yields range from 4.20% in 2014 to 5.85% in 2032, all priced at par. The deal also contains a $177 million series of capital appreciation bonds, which matures in 2014, 2018, and from 2022 through 2025. The credit is rated Aa3 by Moody's Investors Service, and AA by Standard & Poor's and Fitch Ratings.

Goldman, Sachs & Co. priced $428.8 million of subordinated power supply revenue refunding bonds for the Intermountain Power Agency in Utah. The bonds mature from 2009 through 2023, with yields ranging from 2.25% with a 5.25% coupon in 2009 to 4.65% with a 5.25% coupon in 2023. The bonds, which are callable at par in 2013, are rated A1 by Moody's, A by Standard & Poor's, and A-plus by Fitch.

Wachovia Bank NA priced $239 million of certificates of participation for Arizona. The bonds mature from 2009 through 2027, with yields ranging from 2.14% with a 3.25% coupon in 2009 to 4.52% with a 5% coupon in 2027. The bonds, which are callable at par in 2018, are insured by Financial Security Assurance Inc. The underlying credit is rated A1 by Moody's and AA-minus by Standard & Poor's.

Morgan Stanley priced $195.2 million of GO refunding bonds for Philadelphia. The bonds mature from 2008 through 2027, with a term bond in 2032. Yields range from 1.75% with a 4% coupon in 2008 to 4.82% with a 5.25% coupon in 2032. The bonds, which are callable at par in 2018, are insured by FSA. The underlying credit is rated Baa1 by Moody's, BBB by Standard & Poor's, and BBB-plus by Fitch.

JPMorgan priced $116.4 million of revenue bonds for the Connecticut Health and Educational Facilities Authority in two series. Bonds from a $64.7 million series of bonds mature from 2008 through 2028, with a term bond in 2031. Yields range from 1.95% with a 4% coupon in 2008 to 4.77% with a 5% coupon in 2031. Bonds from a $51.7 million series mature from 2009 through 2028, with yields ranging from 2.56% with a 4% coupon in 2010 to 4.70% with a 5% coupon in 2028. Bonds maturing in 2009 were decided via sealed bid. All the bonds, which are callable at par in 2018, are insured by MBIA Insurance Corp. The underlying credit is rated A2 by Moody's and A-minus by Standard & Poor's.

The Florida Department of Environmental Protection competitively sold $99.7 million of revenue refunding bonds to UBS Securities LLC with a true interest cost of 4.27%. The bonds mature from 2.15% with a 3% coupon in 2008 to 4.59% with a 4.5% coupon in 2025. The bonds, which are callable at 101 in 2017, declining to par in 2018, are insured by Assured Guaranty Corp. The underlying credit is rated A1 by Moody's, AA-minus by Standard & Poor's, and A-plus by Fitch.

Merrill Lynch & Co. priced $95.2 million of unlimited-tax school building and refunding bonds for the Clear Creek, Tex., Independent School District. The bonds mature from 2010 through 2030, with a term bond in 2033. Yields range from 2.37% with a 4% coupon in 2010 to 4.67% with a 5% coupon in 2033. The bonds, which are callable at par in 2017, are backed by the state's triple-A Permanent School Fund guarantee program. The underlying credit is rated Aa3 by Moody's and AA by Standard & Poor's and Fitch.

Morgan Stanley priced $74.8 million of tax-exempt and taxable revenue refunding bonds for the New Jersey Educational Facilities Authority. Bonds from a $68.6 million tax-exempt series mature from 2009 through 2019, with term bonds in 2023, 2028, and 2035. Yields range from 1.85% with a 4% coupon in 2009 to 4.72% with a 5% coupon in 2035. The deal also contains a $6.2 million taxable component, which matures in 2036. The bonds are insured by Assured Guaranty, and the underlying credit is rated A3 by Moody's and A-minus by Fitch.

 

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