The Bond Buyer’s weekly yield indexes declined this week, as municipal bond prices rose in nearly all the week’s sessions.

“The market has been very strong. We’ve certainly seen strong bids for high-grade bonds, particularly in the 12- to 14-year range,” said Howard Mackey, president of the broker-dealer business unit of Rice Financial Products. “Uninsured paper is probably trading about five or six basis points off the [Municipal Market Data] scale. A lot of people just realized that munis are cheap now, but because of subprime, there’s still fear of pursuing lower-rated credits. However, there will be pretty good bids on bonds double-A rated and above.”

The municipal bond market was firmer by two to four basis points Friday in moderate trading, as the December non-farm payrolls number came in lower than expected. Munis were firmer by one or two basis points Monday, in a session largely free of economic data.

On Tuesday, municipal yields were lower by two or three basis points as Washington brought to market the week’s largest scheduled bond deal. The state competitively sold $921 million of general obligation bonds in two series. Bonds in the larger series, $546.2 million, are various purpose, and were sold to Merrill Lynch & Co. at a true interest cost of 4.31%. Bonds in the smaller series, $375 million, are motor vehicle fuel-tax bonds, and were sold to Citi with a TIC of 4.31%. The bonds are rated Aa1 by Moody’s Investors Service, AA-plus by Standard & Poor’s, and AA by Fitch Ratings.

Tax-exempts were firmer by three or four basis points Wednesday as New York’s Empire State Development Corp. came to market with a $521 million deal. Citi priced $520.7 million of state personal income tax revenue bonds for the ESDC in two series. The bonds are rated AAA by Standard & Poor’s and AA-minus by Fitch.

Yesterday, the municipal market was mixed overall amid short-end gains and long-end losses, following Treasuries, which moved in divergent directions after a speech by Federal Reserve Board chairman Ben S. Bernanke warning that further cuts to the federal funds rate target may be necessary.

The Bond Buyer 20-bond index of GO yields fell 11 basis points this week to 4.21%, its lowest level since March 22, when it was 4.20%.

The 11-bond index dropped 10 basis points to 4.14%, its lowest level since March 22, when it was also 4.14%.

The revenue bond index fell six basis points to 4.66%, the lowest level since Aug. 2, when it was also 4.66%.

The 10-year Treasury note, however, rose one basis point to 3.90%, but remained below its 4.19% level from two weeks ago.

The 30-year Treasury bond rose nine basis points to 4.45%, but remained below its 4.60% level from two weeks ago.

The Bond Buyer one-year note index fell 24 basis points to 2.68%, which is the lowest since 2.67% on July 20, 2005.

The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index finished at 4.78%, down six basis points from last week’s 4.84%.

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