Puerto Rico bonds out for bid in the secondary market were the focus of the municipal bond market, following news Wednesday that Massachusetts secretary of the commonwealth William Galvin announced his securities division began an inquiry to determine investors' exposure to Puerto Rico.

Thursday morning, traders said the most active bonds trading were Puerto Rico Sales Tax Financing Corp. In block size trading, the subordinate COFINA 5.25s of 2043, rated A3 by Moody's Investors Service and A-plus by Standard & Poor's and Fitch Ratings, traded at 8.35% and 8.31%.

Another trader said $5 million of Puerto Rico Public Building Authority 5s of 2015 traded at 4.53% with insurance from Assured Guaranty Municipal Corp.

"There are a ton of bids wanted, but nothing is really going on with them. It's small trading mostly."

Wednesday evening, the Government Development Bank of Puerto Rico also announced it plans to host an investor call Tuesday, Oct. 15, to update investors on their fiscal plans. "Puerto Rico continues to take significant steps to strengthen our fiscal situation and spur economic growth, and we look forward to updating the financing community on these measures, as well as recent tax revenues, our liquidity position, and our financing plans through the end of the year," the GDB said.

Puerto Rico Governor Alejandro Garcia Padilla also signed into law Wednesday the Dedicated Sales Tax Fund Act, which expanded the capacity of COFINA to issue bonds and "will facilitate the execution of cost-effective financing for the commonwealth," the GDB said. Bonds issued by COFINA will be subordinate to current COFINA bondholders.

In the primary Thursday, Bank of America Merrill Lynch is expected to price for institutions the largest deal of the week, $584.5 million of Wisconsin general obligation bonds, rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.

In retail pricing Wednesday, yields on the first series of $402.7 million of general obligation refunding bonds ranged from 0.70% with a 3% coupon in 2016 to 4.20% with a 4.125% coupon in 2033. The bonds are callable at par in 2023.

The second series of $181.8 million of GO refunding bonds were not offered for retail.

On Wednesday, the triple-A Municipal Market Data scale steepened with yields on the short-end falling and yields on the long-end rising. The 10-year and 30-year yields rose two basis points each to 2.56% and 4.14%, respectively. The two-year was steady for the seventh session at 0.37%.

Yields on the Municipal Market Advisors benchmark scale ended as much as three basis points higher. The 10-year yield increased one basis point to 2.72% and the 30-year yield climbed two basis points to 4.30%. The two-year was steady at 0.55% for the second session.

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