Issuers out of Texas took advantage of stability in the market with three deals each over $100 million leading issuance Tuesday.

"It's the size of the deals that are driving interest," a Texas trader said. "The maturities are shorter and there is a fair amount of retail."

Many of the deals were structured with 4% and 5% coupons, helping to lure in institutional interest as well. "Institutions are buying up those cheap bonds."

JPMorgan priced and repriced $282.8 million of Austin, Texas, water and wastewater system revenue refunding bonds, rated double-A by Moody's and Standard & Poor's, and AA-minus by Fitch.

Yields ranged from 0.63% with a 4% coupon in 2015 to 4.51% with a 5% coupon in 2043. The bonds are callable at par in 2023. Yields were lowered as much as 10 basis points on bonds maturing before 2029, with most of the bumps in prices between 2016 and 2019.

Ramirez & Co. priced $193 million of Dallas, Texas, general obligation refunding and improvement bonds, rated Aa1 by Moody's and AA-plus by Standard & Poor's.

Yields ranged from 0.52% with a 4% coupon in 2015 to 4.00% priced at par in 2032. The bonds are callable at par in 2023 except bonds maturing in 2032. Credits maturing in 2014 were offered via sealed bid.

Bank of America Merrill Lynch priced for retail $187.4 million of Tarrant County Cultural Education Facilities Finance Corp. for the Methodist Hospitals of Dallas.

Yields ranged from 0.82% with a 3% coupon in 2015 to 4.91% with a 4.75% coupon in 2043. Bonds maturing in 2014 were offered via sealed bid. Portions of bonds maturing between 2025 and 2043 were not offered for retail. The bonds are callable at par in 2023.

Outside the Texas deals, the trader said most interest was focused on the short-end and long-end of the curve. "I think it's firming up," he said. "I thought it would be weaker early but the way deals are going and with the fair amount of activity, I bet the trade count is above 45,000 if not pushing 50,000. There is good flow and the buy side number of trades remains strong so people are feeling good about it."

Issuers in California also took advantage of demand. Morgan Stanley priced the largest deal of the day, $631.5 million of California Health Facilities Financing Authority revenue bonds for the St. Joseph Health System. The bonds are rated A1 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.

Yields on the $331.5 million part ranged from 3.43% with a 4% coupon in 2021 to 5.05% with a 5% coupon in 2037. The bonds are callable at par in 2023. Traders said bonds maturing between 10 and 13 years were 12 to 15 times oversubscribed. Yields were lowered as much as 10 basis points in repricing.

The remaining $300 million was divided into three series.

The first series of $100 million was priced 85 basis points above Monday's Municipal Market Data scale with a 5% coupon maturing in 2043. The bonds have a mandatory put date in 2017.

The second series of $100 million was priced 95 basis points above the MMD scale with a 5% coupon in 2032. The bonds have a mandatory put date in 2019.

The third series of $100 million was priced 100 basis points above MMD with a 5% coupon in 2043 with a mandatory put date in 2020.

Monday, yields on the Municipal Market Data scale ended as much as seven basis points higher. The 10-year yield increased five basis points to 2.71% and the 30-year yield rose one basis point to 3.96%. The two-year was steady for the second session at 0.52%.

Yields on the Municipal Market Advisors scale also ended as much as seven basis points higher. The 10-year yield rose six basis points to 2.88%. The two-year and 30-year yields increased one basis point each to 0.56% and 4.08%, respectively.

Treasuries were mixed Tuesday afternoon. The benchmark 10-year yield fell one basis point to 2.63% and the 30-year yield rose one basis point to 3.64%. The two-year was steady at 0.36%.

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