The municipal market treaded water Thursday as it absorbed the remains of a busy weekly calendar and investors reacted to the threat of a downgrade to junk status of about $52 billion of Puerto Rico bonds. Tax-exempt yields felt a shade higher Thursday as large deals arrived mostly priced to move, traders said. Participants also took note of a late-Wednesday report by Moody's Investors Service that placed on review for downgrade most of Puerto Rico's debt.

Yields for much the commonwealth's paper climbed in the secondary. Reports in the morning showed yields on Puerto Rico paper trading at least 15 basis points higher than they did one day earlier.

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