Inventory builds as buyers await upcoming slate; prices are mixed.

Futures prices made gains with Treasuries yesterday, but the municipal cash market was widely mixed in scattered trading.

The cash market opened down about 1/8 point, adding onto a string of losses. The futures contract enjoyed some recovery, thanks to higher Treasury prices, but the strength only partly transferred to the rest of the municipal market. Dealers said a downward bias prevailed.

"It was an inside day and we didn't see any solid going-away business" said a trade at a large firm based in New York. "I'm still inclined to be defensive. The buyers want to clear the decks, sell some stuff, and get ready to buy next week's calendar."

Buyers said yesterday they stepped away from new issues, in part, because of high prices, but mostly because the forward calendar is building. "We're seeing a heavier calendar and that's allowing us to be a little bit more picky," one buyer said late yesterday.

Looking to forward supply, The Bond Buyer calculated 30-day visible supply yesterday at $6.31 billion, up from $5.2 billion Tuesday.

There was little news to move prices, leaving market players to ride rudderless through choppy trading waters. Traders reported significant bid-wanted lists and sizable blocks of bonds, but little was said to trade.

By session's end, some dollar bonds were quoted 1/4 point higher, while others were unchanged or just as low.

Taking their lead from a stronger Treasury market, the December municipal contract settled up 9/32 to 103.23, just below the high of 103.25. The MOB spread widened to negative 449 from negative 454.

Some traders said the improvement in the futures market may be the first sign of a recovery. "All the action is in the futures market, and it may be the beginning of another up-trend," a trader said.

New issues received a muted reception from investors, although in some cases underwriters were able to raise prices to lower yields. Players have been watching the results of the sales to determine demand, but signals have been just as mixed as they have been in the secondary market. The tone has grown heavier with each day as dealers are forced to stock more bonds they are unable to sell.

Reflecting the increased secondary supply, The Blue List rose yesterday for the ninth day in a row, up $76 million to $1.75 billion.

New Deals

Morgan Stanley & Co. priced, and then repriced $419 million revenue and refunding bonds through the New York State Dormitory Authority for City University.

At the repricing, yields were raised by five basis points for most serial bonds, and by two basis points on the maximum term bonds.

The final offering included $51 million series 1993B bonds; priced to yield from 3.55% in 1995 to 5.55% in 2007. There was $270 million series 1993F bonds priced to yield from 4.30% in 19.97 to 5.55% in 2007.

A 2012 term, containing $63 million, was priced as 5 1/2s to yield 5.67%; a 2014 term was priced as 5s to yield 5.67%; and a 2020 term, containing $113 million, was priced as 58 to return 5.70%.

The dorm issue also included $39 million series V bonds priced to yield from 4.75% in 1999 to 5.50% in 2006, and $69 million consolidated second general resolution revenue bonds priced to yield from 3.55% in 1995 to 5.55% in 2007 and 5.62% in 2010.

The bonds are rated Baal by Moody's Investors Service and BBB by Standard & Poor's Corp.

In other action, J.P. Morgan Securities Inc. priced, repriced, and restructured $196 million Fresno, Calif., sewer system revenue bonds.

At the repricing, the amount of the issue was reduced from $198 million and a 2019 term replaced a 2018 maturity, while a 2021 term was added to the scale. Reoffering yields were lowered by about three basis points in 2005 and by five basis points on bonds from 2006 through 2008.

The final offering included serial bonds priced to yield from 3.55% in 1996 to 5.20% in 2010. A 2014 term, containing $29 million of the loan, was priced with a coupon of 6.25% to yield 5.25%; a 2019 term, containing $48 million, was priced as 5 1/4s to yield 5.30%; a 2021 term was priced as 4 3/4s to yield 5.30%; and a 2023 term was priced as 4 1/2s to yield 5.33%.

The issue is insured by the AMBAC Indemnity Corp. and rated triple-A by Moody's and Standard & Poor's.

PaineWebber Inc. priced and repriced $165 million limited tax revenue refunding bonds for the Detroit, Mich., Convention Facility's Cobo Hall expansion project.

At the repricing. yields were lowered by about three basis points in 2012. Serial bonds were priced to yield from 3.75% in 1996 to 5.45% in 2007. A 2012 term, containing $67 million, was priced as 5 1/4s to yield 5.625%.

The bonds are rated A by Standard & Poor's.

Smith Barney Shearson priced $158 million student loan revenue and revenue refunding bonds for the Michigan Higher Education Student Loan Authority.

The firm said it received the verbal award at the original price levels.

The offering, subject to the federal alternative minimum tax, included $78 million bonds priced at par to yield from 4.30% in 1998 to 5.05% in 2004 and 5.40% for bonds maturing in 2008.

There also was $80 million priced as an auction-rate security.

The issue is AMBAC-insured and rated triple-A by Moody's and Standard & Poor's.

Goldman, Sachs & Co. priced, repriced, and restructured $144 million Sacramento Municipal Utility District electric revenue refunding bonds.

Serial bond yields were lowered by five basis points from 1996 through 2000, at the repricing. A 2013 term replaced a 2012 maturity.

The final scale included serials priced to yield from 2.80% in 1994 to 5.20% in 2009. A non-callable 2013 term was priced as 61/2s to return 5.25% and a 2021 maximum term maturity, containing $82 million, was priced as 4 3/4s to yield 5.35%.

The bonds are insured by the Municipal Bond Investors Assurance Corp. and rated triple-A by Moody's, Standard & Poor's, and Fitch Investors Service.

Grigsby Brandford & Co. priced $101 million lease revenue bonds for the California State Public Works Board.

The firm said it received the verbal award at the original price levels.

Serial bonds were priced to yield from 2.80% in 1994 to 5.25% in 2007. A 2013 term was priced as 5 1/4s to yield 5.50% and a 2018 term was priced as 5 1/2s to yield 5.583%.

The bonds are rated conditional Al by Moody's, provisional A-minus by Standard & Poor's, and A-plus by Fitch.

Secondary Markets

In secondary dollar bond trading, prices were mixed, and bid and offered spreads were wide on many names, traders said.

In late action, South PUB 5 1/8s of 2032 were quoted at 5.51% bid, 5.50% offered; Guam 5.40s of 2018 were at 98 1/4-3/4 to yield 5.53%; and South Carolina PSA 5s of 2025 were 5.41% bid, 5.39% offered.

Washington Public Power Supply System 5 3/8s of 2015 were quoted at 5.63% bid, 5.61% offered; Florida MPA AMBAC 4 1/2s of 2027 were at 87-88 to yield 5.33%; and Florida State Board of Education 5 1/4s of 2023 were 97 3/4-98 to yield 5.40%.

In the short-term note sector, yields Were mostly unchanged.

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