The tax-exempt market was firmer Thursday afternoon as the week's largest deals saw positive reception and muni bond prices caught up to higher Treasuries.

California Public Works Board and New Jersey Building Authority issued bonds for institutional investors in a market with an overall firmer tone.

"Yesterday the market was stirring the soup and today it's ready," a Chicago trader said. "Deals are coming firm and the secondary is stronger."

This trader said Treasury prices were higher Thursday morning but traded flat in the afternoon. Still, munis needed to play catch-up to the gains posted in the Treasury market earlier in the week. "Today and tomorrow munis will play catch-up as long as Treasuries stay flat."

"We are in a good position for next week," he said. "Every day that the stock market rolls up, more people think someone is going to stick a pin in it. So we are in good shape."

In the primary market, RBC Capital Markets priced for institutions $639.4 million of California State Public Works Board lease revenue bonds, rated A2 by Moody's Investors Service and A-minus by Standard & Poor's and Fitch Ratings.

Yields ranged from 1.09% with 4% and 5% coupons in a split 2017 maturity to 5.13% with a 5% coupon in 2038. Bonds maturing in 2016 were offered via sealed bid. The bonds are callable at par in 2023. Yields were unchanged from Wednesday's retail pricing except bonds maturing in 2038 which were raised three basis points.

Morgan Stanley priced for institutions $327.8 million of New Jersey Building Authority revenue bonds, rated A1 by Moody's and A-plus by Standard & Poor's and Fitch.

The first series of $47.6 million of bond anticipation notes yielded 0.67% with a 3% coupon in 2016. The bonds are callable at par in 2015.

Yields on the second series of $258.6 million of revenue refunding bonds ranged from 0.49% with 3% and 5% coupons in a split 2015 maturity to 4% priced at par in 2027. The bonds are callable at par in 2023. Yields on bonds maturing in 2015 and 2016 were each lowered two basis points from retail pricing. Yields on bonds maturing between 2021 and 2027 were lowered as much as three basis points from retail pricing.

The third series of $21.6 million of taxable building revenue refunding bonds were priced at par to yield from 0.748% in 2015 to 2.303% in 2018. Spreads ranged from 45 basis points to 95 basis points above the comparable Treasury yield.

In the secondary market, retail activity for the week through Wednesday slowed significantly to its lowest in at least five weeks, according to BondDesk Group, which tracks trades of under 100 bonds.

The number of customer buy trades slipped to 63,207 for the week ending Nov. 13, down from the previous week's 76,242. It was the lowest in at least five weeks, dropping below 64,100 buy trades for the week ending Oct. 16.

The number of customer sell trades fell to 29,694 from the previous week's 32,835. It was the lowest in five weeks, falling below 31,402 sell trades for the week ending Oct. 16.

In par value traded, customer buy trades slipped to $1.6 billion from $1.987 billion the previous week, falling to its lowest in five weeks and below the $1.606 billion bought in the week ending Oct. 16.

Par value of investor sell trades fell to $808 million from the previous week's $915 million. It was the lowest in five weeks, falling below the $848 million traded the week ending Oct. 16.

The buy-to-sell ratio of number of trades and par value subsequently slipped to 2.1% from 2.3% and 2.0% and 2.2%, respectively.

On Wednesday, the triple-A Municipal Market Data scale ended flat after two weaker sessions. The 10-year yield and 30-year yields were flat at 2.62% and 4.16%, respectively. The two-year was steady for the 11th session at 0.34%.

Yields on the Municipal Market Advisors benchmark scale fell as much as six basis points Wednesday after two sessions of losses. The 10-year yield fell three basis points to 2.74% and the 30-year yield dropped two basis points to 4.36%. The two-year yield dropped four basis points to 0.44%.

Treasuries were stronger Thursday afternoon after Janet Yellen testified before the Senate Banking Committee, before deciding on her nomination to chair the Federal Reserve Board. The two-year yield slid two basis points to 0.30% and the benchmark 10-year yield fell one basis point to 2.72%. The 30-year yield dropped three basis points to 3.81%.

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