The municipal bond market took a beating for the second consecutive session Thursday as the fallout from Federal Reserve chairman Ben Bernanke’s testimony Wednesday continued into another day and issuers were forced to delay their pricings.

Munis prices were pummeled, following Treasuries, in reaction to Bernanke saying the Fed may start tapering its $85 billion-a-month bond purchases by the end of 2013.

The selloff forced issuers out of the market. California Health Facilities Financing Authority was expected to issue nearly $800 million of new money and refunding bonds – the largest deal of the week – and said it postponed the sale due to market conditions.

New York’s Metropolitan Transportation Authority postponed its $350 million deal following retail order period Wednesday.

“Based on market conditions, the issuer has decided to put the transaction on day to day status,” RBC Capital Markets, the lead underwriter on the deal, said in a statement. “As such, all orders entered during the retail order period are released. The syndicate will be notified of the time frame the issuer will utilize to enter the market.”

California’s City of Hope postponed a $250 million taxable general obligation note sale also scheduled for Thursday.

“It’s a massacre,” a New York trader said. “There are huge bid lists out there from the big funds.”

Another trader said during the morning that  the market could be 20 basis points weaker by Friday.

Still, some traders said the selloff was cheapening munis to attractive levels. “Lower rated credits like Detroit and Puerto Rico are pretty loose now,” a New Jersey trader said. “The stronger credits are more defensive and more stable. There is more of a shakeup with the junk stuff.”

“Clients call me up and tell me they want to sell, and it’s a perfect example of the general public panicking,” he added.

A few deals did move forward  in the primary. Jefferies & Co. priced $240 million of Dallas-Fort Worth International Airport joint revenue improvement bonds, subject to the alternative minimum tax. The bonds are rated A2 by Moody’s Investors Service, A-plus by Standard & Poor’s and A by Fitch Ratings.

The deal was lowered in repricing from $376.7 million and the underwriter cut serial maturities between 2026 and 2033, leaving only term bonds in 2038, 2043, and 2045.

The bonds yielded 5.125% with a 5% coupon in 2038, 5.20% with a 5.125% coupon in 2043, and 4.75% priced at par in 2045. The bonds are callable at par in 2022 except for bonds maturing in 2045.

Morgan Stanley priced $223.2 million of Massachusetts Educational Financing Authority loan revenue bonds subject to the alternative minimum tax. The bonds are rated AA by Standard & Poor’s and A by Fitch.

Yields ranged from 1.35% with a 2% coupon in 2015 to 5.45% with a 5.375% coupon in 2032. The bonds are callable at par in 2022.

In the competitive market, Bank of America Merrill Lynch won the bid for $154.1 million of Anne Arundel County, Md., GOs, rated Aa1 by Moody’s and AAA by Standard & Poor’s.

Yields on the first series, $116 million of consolidated general improvement bonds, ranged from 0.19% with a 4% coupon in 2014 to 3.76% with a 5% coupon in 2033. The bonds are callable at par in 2023.

Yields on the second series, $38.1 million of consolidated water and sewer bonds, ranged from 0.19% with a 4% coupon in 2014 to 4.58% with a 4.5% coupon in 2043. The bonds are callable at par in 2023.

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

Yields on California 5s of 2042 jumped 14 basis points to 4.40% and Franklin County, Tenn., Health and Educational Facilities Board 3s of 2021 jumped 10 basis points to 3.04%.

Thursday, yields on the Municipal Market Data scale ended as much as 20 basis points higher. The 10-year and 30-year yields spiked 20 basis points each to 2.48% and 3.78%, respectively. The two-year yield rose five basis points to 0.37%.

Yields on the Municipal Market Advisors 5% scale closed as much as 21 basis points higher. The 10-year jumped 21 basis points to 2.60% and the 30-year yield spiked up 19 basis points to 3.88%. The two-year yield rose eight basis points to 0.47%.

Treasuries yields continued to rise. The benchmark 10-year yield increased seven basis points to 2.40% and the 30-year yield increased eight basis points to 3.49%. The two-year yield rose two basis points to 0.33%.

In retail size trading, or those trades under 100 bonds, activity rose this week and was the highest in five weeks, according to BondDesk Group.

There were 78,327 buy trades for the week ending June 19, up from the previous week’s 73,797 buy trades. The number of buy trades has increased for the third consecutive week.

Sell trades also increased for the third week and were the highest in five week. There were 43,583 sell trades, up from the previous week’s 42,353 trades.

The ratio of buy to sell trades rose to 1.8 from 1.7.

Par value of trades also rose for the third week and was the highest in five. There were $2.085 billion buy trades for the week ending June 19, up from $1.952 billion buy trades the previous week.

Sell trades increased to $1.154 billion from $1.128 billion. The ratio of buy to sell trades in par value increased to 1.8 from 1.7.

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