Municipal bonds were little changed in today's trading, but the real story came out of the new-issue market, where California was able to sell about 60% of its $4 billion offering of general obligation bonds to retail investors. By the early afternoon, California's lead underwriter, Merrill Lynch, let it be known that the syndicate had sold $2.4 billion of GOs. While this did not spur any secondary market activity of note, it is a good sign for the week to come. In terms of day-to-day total returns: -- The high-grade, short end of the curve showed a total return of positive 0.06%, according to Municipal Market Advisors (MMA) data. -- The high-grade, intermediate part of the curve showed a total return of positive 0.05%. -- The high-grade, long end of the curve showed a total return of positive 0.07%. The high-grade marketplace of bonds rated double-A or better was very lightly traded for a second straight trading session. Just like on Friday, participants are waiting to get a better sense of how retail is doing with these new issues. High-grade deals this week are on the back burner due to the large California offering, which is not considered a high-grade credit. That being said, the entire market is tied to California because it is so large. Thus, its success in distributing bonds to retail should make for some positive follow-through trading as the week progresses. In the non-investment grade sector of non-rated bonds or single-A and lower, trading was very sparse. Once again, it has become difficult to make broad statements about how the lower-rated credit spectrum traded, as it was very much mixed.