Higher-yielding credits in the municipal bond market traded more actively than high-grade bonds after last week's rally left buyers searching for yield in lower-rated credits.

Traders said California and tobacco bonds were the most traded Monday morning. Ohio's Buckeye Tobacco Settlement Financing Authority 5.875s of 2047 were one of the most actively traded, with $24 million in transactions by afternoon, one Chicago trader said. "There are quite a few big trades in interdealer and to customers and a bit firmer too," he said. "Some are better by four basis points. It's the second highest name traded today behind California GOs."

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