The tax-exempt market ended Tuesday on a strong note as the week’s largest deals priced and were very well received.

Traders noted that while the focus was on the primary market as deals priced for institutions, the secondary also held up well.

“There is definitely a better tone today,” a New Jersey trader said Tuesday. “The focus is on the primary but the secondary is holding in too.”

Overall, the trader said the muni bond market is about two to three basis points stronger.

In terms of new deals coming to market, the New York City general obligation bonds are priced cheap, this trader said. “And all of it was well received. NYC was cheapened from retail and really attractive. So it got high demand. That seems to be the driving force is buying more yield.”

One institutional trader who is active in the secondary market anticipated a slow day ahead of the primary stealing the focus. “It should be a busy day, but not for us,” the New York trader said.

In the primary market, the Pennsylvania Economic Development Financing Authority issued $2.5 billion of tax-exempt bonds for institutional investors in two pricings, rated Aaa by Moody’s Investors Service, and AA-plus by Standard & Poor’s and Fitch Ratings.

In the institutional order period Tuesday for $1.4 billion of unemployment compensation bonds priced by Citi, yields ranged from 0.34% and 0.38% with 3% and 4% coupons in a split 2014 maturity to 1.15% with 4% and 5% coupons and 1.23% with a 5% coupon in a split 2019 maturity. Credits maturing in 2013 were offered via sealed bid.

Bank of America Merrill Lynch priced for institutions $1.1 billion of unemployment compensation revenue bonds, following a retail order period Monday. Yields ranged from 1.42% and 1.47% with 5% coupons in a split 2020 maturity to 0.97%, 0.80%, and 0.70% with 5% coupons in a split 2023 maturity. Credits maturing in 2020 are callable at par in 2019. Credits maturing in 2021 are callable at par in 2018 and 2019, credits maturing in 2022 are callable at par in 2016 and 2017, and credits maturing in 2023 are callable at par in 2015 and 2016. Yields were lowered 15 basis points from retail pricing on bonds maturing in 2021 and 2023.

JPMorgan priced for institutions $1 billion of City of New York general obligation bonds, following a two-day retail order period. The bonds are rated Aa2 by Moody’s and AA by Standard & Poor’s and Fitch and the deal was upped in size from the expected $825 million.

In institutional pricing, yields on the first series, $525 million, ranged from 0.56% with a 5% coupon in 2015 to 3.45% with a 3.375% coupon in 2035. Bonds maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2022. Yields were increased as much as five basis points from retail pricing.

Yields on the second series, $359.5 million, ranged from 0.56% with 3% and 5% coupons in a split 2015 maturity to 3.24% with a 3.125% coupon in 2032. Bonds maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2022. Yields were increased as much as seven basis points except for yields on the 2032 maturity which were lowered one basis point from retail pricing.

Yields on the third series, $115.5 million, ranged from 0.56% with 2% and 4% coupons in 2015 to 3.29% with a 3.25% coupon in 2033. Bonds maturing in 2013 and 2014 were offered via sealed bid. The bonds are callable at par in 2022. Yields were increased as much as seven basis points except for the 2020, 2032, and 2033 maturities which were lowered one and two basis points.

RBC Capital Markets priced for institutions $369.2 million of Dormitory Authority of the State of New York districts revenue bonds financing program revenue bonds, following a retail order period Monday.

The first series of $171.6 million is rated A-plus by Standard & Poor’s and Fitch. Bonds that were insured by Assured Guaranty Municipal Corp. are rated AA-minus by Standard & Poor’s. Yields ranged from 0.60% with a 3% coupon and 0.65% with a 4% coupon in a split 2014 maturity to 3.18% with a 3.15% coupon in 2030. Bonds maturing in 2013 were offered via sealed bid. The bonds are callable at par in 2022. Yields were lowered two and four basis points on selective maturities.

The second series of $79.4 million is rated AA-plus by Standard & Poor’s and A-plus by Fitch. Yields ranged from 0.50% with a 5% coupon and 0.55% with a 3% coupon in a split 2014 maturity to 2.83% with a 5% coupon in 2030. Credits maturing in 2013 were offered via sealed bid. The bonds are callable at par in 2022. Yields were lowered two basis points on the 2014 and 2028 maturity.

The third series of $76.5 million is rated Aa3 by Moody’s and A-plus by Fitch. Yields ranged from 0.55% with a 3% coupon and 0.60% with a 5% coupon in a split 2014 maturity to 3.25% priced at par in 2031. Credits maturing in 2013 were offered via sealed bid. The bonds are callable at par in 2022. Yields were lowered two basis points on selective maturities.

The fourth series of $13.1 million is rated AA by Standard & Poor’s and A-plus by Fitch. Yields ranged from 0.55% with a 2% coupon and 0.58% with a 4% coupon in a split 2014 maturity to 1.40% with a 3% coupon in 2018. Bonds maturing in 2013 were offered via sealed bid.

The fifth series of $22.2 million is rated AA-minus by Standard & Poor’s and A-plus by Fitch. Yields ranged from 0.60% with a 4% coupon in 2014 to 2.80% with a 3% coupon in 2024. Credits maturing in 2013 were offered via sealed bid. The bonds are callable at par in 2022.

The last series of $6.4 million is rated A-plus by Standard & Poor’s and Fitch and AA-minus on certain credits that are insured by AGO. Yields ranged from 0.60% with a 3% coupon and 0.65% with a 4% coupon in a split 2014 maturity to 2.42% with a 3% coupon in 2022. Bonds maturing in 2013 were offered via sealed bid.

On Tuesday, the 10-year Municipal Market Data yield and the 30-year yield fell one basis point each to 1.69% and 2.84%, respectively. The two-year closed flat for the sixth session at 0.30%.

Treasuries ended Tuesday mostly flat. The two-year yield and benchmark 10-year yield were steady at 0.24% and 1.62%, respectively. The 30-year yield fell one basis point to 2.81%.

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