The tax-exempt market ended Friday on a quiet note as traders said bonds traded steady.

Throughout the day, traders said bid lists started to wind down as the three-day holiday weekend neared.

“For the most part it’s been fairly light trading today,” a Virginia trader said. “We’ve seen a fair amount out for bid and a couple of lists but it’s winding down even more.”

He added that traders are already looking to next week’s issuance. “Next week should be interesting given that the supply is concentrated in two large deals but we have $9 billion to sift through in a shortened week.”

Bonds seemed to take a breather after substantial firming throughout the week.

“It’s quiet so far,” a Chicago trader said. “Spreads are getting awful tight here. If we get some real supply, we’ll see how deep the current bid-side is.”

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

Yields on Puerto Rico Commonwealth 5.5s of 2039 plunged six basis points to 5.15%. Yields on New Jersey Turnpike Authority 5s of 2020 and Dallas-Fort Worth International Airport 5s of 2037 dropped five basis points each to 1.60% and 3.64%, respectively.

Yields on Ohio’s Buckeye Tobacco Settlement Financing Authority 5.875s of 2047 and Boston, Mass., 5s of 2022 fell one basis point each to 6.63% and 1.53%, respectively.

On Friday, Thursday, the Municipal Market Data scale ended mostly steady. The 10-year and 30-year yields finished flat at 1.67% and 2.72%, respectively. The two-year finished steady at 0.33% for the fourth session.

Treasuries ended stronger Friday. The benchmark 10-year yield fell three basis points to 1.85% while the 30-year yield dropped four basis points to 3.03%. The two-year was steady at 0.27%.

In bond insurance news, Moody’s Investors Service downgraded Assured Guaranty Municipal Corp. two notches Friday morning to A2.

Traders said reaction to the downgrade was fairly muted because it was a quiet Friday ahead of a long weekend.

“As far as trading or lists coming out that are loaded with AGM, I haven’t seen that as of yet,” the Virginia trader said. “Really in the past two to three years, most people were focusing on underlying ratings anyway.”

A Pennsylvania trader agreed reaction was limited. “On my trading desk it is almost a non-event. I expect some retail response next week when news is more broadly spread.”

The Chicago trader also said retail will be most affected. “AGM is worth more to retail. So it will have an impact on the retail market. Retail is where AGM had the most bids and had the most effect so it’s going to be a real challenge.”

As of Friday afternoon, AGM was expected to insure several deals in the primary market in the coming week, including $15.5 million of City of Lewisville, Texas, combination contract revenue and special assessment refunding bonds. The bonds are expected to be priced by Raymond James on Thursday.

AGM is also expected to insure $8.31 million of Brazoria County, Texas, Municipal Utility District unlimited tax general obligation bonds. The deal is expected to be underwritten by RBC Capital Markets.

AGM is also expected to take part in $3.76 million of Saint Thomas Township Municipal Authority guaranteed sewer revenue bonds in Franklin County, Pa. RBC is expected to underwrite the deal Wednesday.

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