The tax-exempt market strengthened for the second session on Wednesday, buoyed by a firmer Treasury market, pushing the 10-year muni bond yield down to its lowest level in four months.

The 10-year triple-A Municipal Market Data yield fell four basis points to 2.53%, its lowest since June 20 when the yield hit 2.48%. Yields spiked up June 20, 21 and 24 after comments from Federal Reserve Chairman Ben Bernanke hinting the Fed would begin tapering its bond purchasing program.

The 30-year triple-A MMD yield also fell four basis points on Wednesday to 4.15%, its lowest since Oct. 9 when the 30-year yielded 4.14%.

The drop in yields comes even with increased new supply this week.

“It’s firmer and trading is a bit heavy, too,” a Chicago trader said. “Treasuries are right on the same path.” Trading volume for the general market was up 3.7% by mid-afternoon from the average of the last five Wednesday trading sessions.

This trader said Puerto Rico bonds were stronger after last week’s investor call by the commonwealth and more positive headlines Wednesday morning about the credit. “That press conference seems to be putting a better tone to Puerto Rico.”

One CUSIP of Puerto Rico Sales Tax Financing Corp. subordinate 5.25s of 2041 traded in the 75- to 76-dollar range Wednesday morning in block-size trading, up in price from the high 50- to 60-dollar range the credit traded at in mid-October.

COFINA trading volume was up 9.9% as of Wednesday afternoon from the average of the previous five Wednesday trading sessions.

One CUSIP of Puerto Rico Aqueduct and Sewer Authority 6.125s of 2024 traded much stronger Wednesday, rising into the 80-dollar range from the low 70-dollar range mid-month. On Wednesday, a customer sold a block size trade at 8.87%, down in yield from a block size trade on Oct. 10 at 10.72%.

PRASA trading volume rose to more than four times the average for the last five Wednesday sessions  with $58 million of par value changing hands.

Puerto Rico bond yields were lowered by 15 to 20 basis points, according to analysts at Interactive Data.

In the primary market, Goldman, Sachs & Co. priced and repriced for institutions $650 million of triple-A New York City Transitional Finance Authority future tax secured subordinate bonds.

Yields ranged from 0.60% with 3% and 5% coupons in a split 2016 maturity to 4.62% with a 4.5% coupon and 4.50% with a 5% coupon in a split 2042 maturity. Bonds maturing in 2015 were offered via sealed bid. The bonds are callable at par in 2023.

In repricing, yields were lowered as much as three basis points. Yields had already been lowered one basis point on bonds maturing in 2033 and two basis points on bonds maturing in 2042 from the second retail order period Tuesday.

Spreads on the TFA bonds with 5% coupons ranged from six basis points to 35 basis points above Tuesday’s triple-A Municipal Market Data scale.

New York City’s TFA also came with two pricings in the competitive market.

JPMorgan won the bid for $350 million of future tax secured taxable subordinate bonds. Yields ranged from 0.55% with a 0.75% coupon in 2015 to 4.42% with a 4.5% coupon in 2030. Spreads ranged from 25 basis points to 180 basis points above the comparable Treasury yield.

Barclays won the bid for $90.3 million of TFA future tax secured taxable subordinate bonds, yielded 4.41% with a 4.6% coupon in 2032.

In other primary market deals, Citi priced for retail $122 million of Tennessee Housing Development Agency residential finance program bonds in two series, rated Aa1 by Moody’s Investors Service and AA-plus by Standard & Poor’s. Institutional pricing is expected Thursday.

The first series, $32 million of bonds subject to the alternative minimum tax, were priced at par to yield 1.20% and 1.30% in a split 2016 maturity and 1.65% and 1.75% in a split 2017 maturity. Bonds maturing in 2014 and 2015 were offered via sealed bid and those maturing in 2043 were not offered for retail. The bonds are callable at par in 2023.

The second series, $90 million of non-AMT bonds, were priced at par to yield 1.75% and 1.85% in a split 2018 maturity to 4.70% in 2033. Bonds maturing in 2043 were not offered for retail and all bonds are callable at par in 2023.

In the secondary market, trades compiled by data provider Markit showed firming.

Yields on Washington 5s of 2027 slid three basis points to 3.44% and Ohio’s Buckeye Tobacco Settlement Financing Authority 5.125s of 2024 fell two basis points to 7.44%.

Yields on Connecticut special tax 5s of 2027 and Contra Costa, Calif., Water District 5s of 2033 slid two basis points each to 3.53% and 4.16%, respectively.

Yields on Long Beach, Calif., Unified School District 5s of 2028 and New York City Transitional Finance Authority 5s of 2029 fell one basis point each to 3.76% and 3.83%, respectively.

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