A "disappointing" day in the municipal market led to a downsizing of Massachusetts' general obligation bond deal and lethargic trading.

"We were hoping the market would feel better but we are not seeing it," a Los Angeles trader said. "Yields are off a little but I think it's been disappointing today."

This trader added the large June 1 reinvestment money was more active in the market Monday. "We are not seeing much of that money today. It seems slow and quiet. The market has no energy and no excitement."

"It's disappointing because stocks are down and Treasuries are doing nothing and there are not enough deals to give the market direction."

That lack of energy translated into Massachusetts downsizing its deal to under $700 million after expecting to issue more than $1 billion.

"They couldn't get the bigger size done," a New York trader said. "Demand wasn't there."

Bank of America Merrill Lynch priced for institutions $675.6 million of Massachusetts bonds, rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.

The first series was downsized to $100 million from $400 million. The bonds yielded 4.05% with a 4% coupon in 2043. The bonds are callable at par in 2021. Yields were flat from Monday's retail pricing after being increased five basis points from Friday's retail pricing.

Bonds on the second series, $100 million of GO green bonds, yielded 3.85% with a 3.75% coupon, 3.67% with a 4% coupon, and 3.20% with a 5% coupon in a split 2033 maturity. The bonds are callable at par in 2021. Yields were flat from Monday's pricing after being increased five basis points from Friday's retail.

Yields on the third series, $475.6 million of GO refunding bonds, ranged from 0.64% with 4% and 5% coupons in a split 2016 maturity to 2.39% with 3% and 5% coupons in a split 2023 maturity. Bonds maturing in 2013 were offered via sealed bid. The bonds are callable at par in 2023. Yields were steady Tuesday after they were raised between five and eight basis points from the first pricing.

Goldman, Sachs & Co. priced and repriced $1 billion of county of Los Angeles tax and revenue anticipation notes, rated MIG-1 by Moody's, SP-1-plus by Standard & Poor's, and F-1-plus by Fitch.

The first series of $300 million yielded 0.16% with a 2% coupon in 2014. The second series of $700 million yielded 0.18% with a 2% coupon in 2014. Yields on the second series were lowered one basis point from preliminary pricing.

In the competitive market, Texas A&M University auctioned $305.8 million of revenue financing system bonds in two pricings, rated Aaa by Moody's and AA-plus by Standard & Poor's and Fitch.

Citi bought the first pricing of $264.9 million. Yields ranged from 0.18% with a 3% coupon in 2014 to 4.04% with a 4% coupon in 2043. The bonds are callable at par in 2023.

JPMorgan won the bid for the second pricing of $40.9 million. Pricing details were not yet available.

Monday, the Municipal Market Data scale flattened. The two-year yield increased one basis point to 0.30% and the 10-year yield fell one basis point to 2.08%. The 30-year was steady at 3.24%.

The Municipal Market Advisors 5% scale ended steady across the curve. The 10-year and 30-year yields finished unchanged at 2.14% and 3.34%, respectively. The two-year finished steady at 0.36% for the fourth session.

Treasuries were slightly weaker Wednesday afternoon. The benchmark 10-year yield increased one basis point to 2.14% and the 30-year yield rose three basis points to 3.30%. The two-year was steady at 0.31%.

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