The municipal market was weaker yesterday.

"There's a lot of offerings, but not a ton getting done. The market is a bit cheaper. Bonds look like they're about three or four basis points cheaper," a trader in New York said. "I'm not going to say that we're following the Treasury market and now we're back to normal, but we're certainly heading in the direction of the Treasury now. That could also be the large issuance we had this week as well, which is probably heavily influencing it."

The Treasury market showed losses yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.46%, finished at 3.52%. The yield on the two-year note was quoted near the end of the session at 1.68% after opening at 1.66%.

"There was definitely weakness in the market," a trader in Los Angeles said. "I'd say it was about three basis points weaker overall, with the most weakness seen in the intermediate part of the curve."

In economic data released yesterday, initial jobless claims for the week ended March 22 came in at 366,000 after a revised 375,000 the previous week. Additionally, continuing jobless claims for the week ended March 15 came in at 2.845 million after a revised 2.850 million the week before. Economists polled by IFR Markets had predicted 370,000 initial jobless claims and 2.870 million continuing jobless claims.

Final fourth-quarter gross domestic product rose 0.6%, matching the 0.6% rise in the previous report for the quarter. Economists polled by IFR had predicted a 0.6% uptick.

In the new-issue market yesterday, Citi priced $326.2 million of revenue bonds for Ascension Health in two series. Bonds from the $102.1 million Series C mature in 2026, yielding 3.50% priced at par. Bonds from the $224.2 million Series E mature in 2036, yielding 3.50%, priced at par. The credit is rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.

The Florida State Board of Education competitively sold $200 million of public education capital outlay bonds to Merrill Lynch & Co., with a true interest cost of 4.89%. The bonds mature from 2008 through 2030, with term bonds in 2032 and 2037. Yields range from 2.00% with a 5% coupon in 2008 to 4.95% with a 5% coupon in 2027. Bonds maturing from 2022 through 2025, and from 2028 through 2037 were not formally re-offered. The bonds are callable at 101 in 2017, declining to par in 2018. The credit is rated Aa1 by Moody's, AAA by Standard & Poor's, and AA-plus by Fitch.

UBS Securities LLC priced $270.5 million of airport facilities refunding revenue bonds for the Greater Orlando Aviation Authority. Bonds from a $242.6 million series subject to the alternative minimum tax mature from 2009 through 2018, with yields ranging from 3.00% with a 5% coupon in 2009 to 5.00% with a 5.25% coupon in 2018. The deal also contains a $27.9 million taxable component, which matures in 2008 and 2009. The bonds, which are not callable, are insured by Financial Security Assurance Inc. The underlying credit is rated Aa3 by Moody's, A-plus by Standard & Poor's, and AA-minus by Fitch.

First Southwest Co. priced $49.3 million of unlimited tax school building bonds for the Waller, Tex., Independent School District in two series. Bonds from the larger series, $48.9 million of current interest bonds, mature from 2011 through 2018, with term bonds in 2020, 2022, 2024, 2026, 2028, 2033, and 2037. Yields range from 2.59% with a 3.25% in 2011 to 5.04% with a 5.5% coupon in 2037. The deal also contains a $430,000 series of capital appreciation bonds. The bonds, which are callable at par in 2018, are backed by the state's triple-A Permanent School Fund guarantee program. The underlying credit is rated A3 by Moody's.

Tulsa, Okla., competitively sold $44.5 million of general obligation bonds to Morgan Stanley with a TIC of 4.33%. The bonds mature from 2010 through 2028, with yields ranging from 2.30% with a 4% coupon in 2010 to 4.85% with a 4.75% coupon in 2029. The bonds, which are callable at 102 in 2016, declining to par in 2018, are rated Aa2 by Moody's and AA by Standard & Poor's.

Naperville, Ill., competitively sold $44.3 million of GOs to UBS with a TIC of 4.24%. The bonds mature from 2009 through 2025, with term bonds in 2029 and 2038. Yields range from 2.15% with a 3.25% coupon in 2009 to 5.07% with a 5% coupon in 2038. Bonds maturing from 2023 through 2025 were not formally re-offered. The bonds, which are callable at par in 2017, are rated triple-A by both Moody's and Standard & Poor's.

Lehman Brothers priced $26.8 million of bonds subject to the alternative minimum tax for the Kentucky Utilities Co. in two series. Bonds from the larger $17.9 million series mature in 2026, yielding 5.75% priced at par. Bonds from the smaller $8.9 million series mature in 2037, yielding 6% priced at par. The bonds, which are callable at par in 2018, are insured by Ambac Assurance Corp. The underlying credit is rated A2 by Moody's and BBB-plus by Standard & Poor's.

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