The tax-exempt market has extended its rally into the second half of the week as traders say supply has outweighed demand with cash on the sidelines finally being put to work, and the outlook isn't expected to change anytime soon.

"The market has been crazy," a New Jersey trader said. "I've never seen anything like this. It's just nonstop every day. Especially in the yield grab and that's been continuous for the past month."

He added while Tuesday and Wednesday were busy, activity was quieter Thursday afternoon. New deals have gone extremely well and the trader said there has been good follow through in the secondary.

"Any new issue that's out of the ordinary is getting bought," the trader added. He said he put in for about $15 million of $110 million of New Jersey Health Care Facilities Financing Authority and received under $1 million. "It was pretty aggressively priced and came in rich and still it was 15 times oversubscribed."

In the primary market Thursday, Bank of America Merrill Lynch priced $779.2 million of Miami-Dade County, Fla., aviation revenue refunding bonds, rated A2 by Moody's Investors Service and A by Standard & Poor's and Fitch Ratings.

Yields on the first series, $672.1 million of bonds subject to the alternative minimum tax, ranged from 0.84% with a 4% coupon in 2014 to 3.34% with a 5% coupon in 2032. Credits maturing in 2013 were offered via sealed bid. The bonds are callable at par in 2022.

Yields on the second series of $107.1 million ranged from 0.51% with a 3% coupon in 2014 to 3.10% with a 3% coupon in 2029. Credits maturing in 2013 were offered via sealed bid .The bonds are callable at par in 2022.

B of A Merrill priced $563.9 million of North Carolina Municipal Power Agency number 1 Catawba electric revenue bonds, rated A2 by Moody's and A by Standard & Poor's and Fitch.

Yields on the first series, $462.6 million of refunding bonds, ranged from 0.55% with 2%, 3%, and 5% coupons in a split 2015 maturity to 1.40% with 3%, 4%, and 5% coupons in a split 2020 maturity.

Yields on the second series of $101.3 million ranged from 1.65% with a 5% coupon in 2021 to 3.05% with a 3% coupon in 2032. The bonds are callable at par in 2022.

In the competitive market, Baltimore County, Md., auctioned $362.6 million of consolidated public improvement bonds, rated triple-A. The four pricings consist of $193 million, $93.1 million, $60 million, and $16.5 million.

Citi won the bid for $193 million. Yields ranged from 0.37% with a 5% coupon in 2015 to 2.55% with a 3% coupon in 2032. Credits maturing in 2013 and 2014 were offered via sealed bid. The bonds are callable at par in 2022.

B of A Merrill won the bid for $93.1 million. Yields ranged from 0.19% with a 5% coupon in 2013 to 1.75% with a 2% coupon in 2024. The bonds are callable at par in 2022.

Wells Fargo Securities won the bid for $230 million of Virginia Housing Development Authority bonds, rated triple-A.

All bonds were priced at par with yields ranging from 0.60% and 0.65% in a split 2014 maturity to 3.25% in 2039. Bonds maturing between 2014 and 2017 are subject to the alternative minimum tax. The bonds are callable at par in 2022.

The Municipal Market Data scale climbed higher Wednesday, setting new record low yields on the 10-year and 30-year yields for the second consecutive session. The 10-year MMD yield fell two basis points to 1.47%, a record low. The 1.47% beat the previous record low of 1.49% set Tuesday. Before that, the record low yield was 1.50% set Nov. 16.

The 30-year MMD yield dropped two basis points to 2.47%, also setting a record low. It beat the previous record of 2.49% set Tuesday and 2.52% set Monday. Before Monday, the record low was 2.54% set Nov. 16.

The two-year finished steady at 0.30% for the 43rd consecutive trading session.

Treasuries were steady to slightly weaker Thursday afternoon. The 30-year yield rose one basis point to 2.80%. The two-year and benchmark 10-year yields were steady at 0.27% and 1.62%, respectively.

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