The tax-exempt market continued to head lower Thursday afternoon with Treasury yields leading the way.

Traders said deals in the primary market went well considering the market has had a weaker tone all week.

"It continues to be soft," a Chicago trader said, adding munis are following Treasuries. "The 10-year Treasury broke a wall. First we thought the range was from 2:50% to 2.80% Then we broke to 2.82%. So now the range is either 2.60% to 2.80% or 2.75% to 3.00%. And that's a whole different mindset. We are either at the top end on the old range or the bottom end of a new range."

In the primary market Thursday, JPMorgan priced and repriced $5.5 billion of California revenue anticipation notes, rated MIG-1 by Moody's Investors Service, SP-1-plus by Standard & Poor's, and F1 by Fitch Ratings.

The first series of $1.5 billion yielded 0.21% with a 2% coupon in 2014. Yields were lowered one basis point from preliminary pricing Thursday morning. In retail pricing Wednesday, prospective yields ranged from 0.18% to 0.23%.

The second series of $4 billion yielded 0.23% with a 2% coupon in 2014. Yields were lowered one basis point from preliminary pricing. In retail pricing, prospective yields ranged from 0.20% to 0.27%.

Retail investors bought $1.65 billion of the deal, representing 30% of the total offering, the Treasurer's office said Wednesday.

When California issued $10 billion of RANs in August 2012, the May 2013 maturities yielded 0.33% and the June 2013 maturities yielded 0.43%.

BMO Capital Markets priced $121.7 million of Chicago Park District limited and unlimited tax bonds, rated A1 by Moody's, AA-plus by Standard & Poor's, and AA by Fitch.

"The parks deal did OK if things keep going the way it's going," the trader said. "But it's already taken a toll. We are getting the Detroit magnetic pull." This trader said the deal priced about where he thought it should price. "It could go 10 or 15 basis points wider or narrower in a run up or selloff and there is more room on this lesser-quality stuff without as much hoopla."

Yields on the first series of $49.9 million of limited tax GOs, ranged from 1.11% with a 4% coupon in 2016 to 5.48% with a 5.75% coupon in 2038. Bonds maturing in 2015 were offered via sealed bid. The bonds are callable at par in 2024.

Yields on the second series of $33.4 million of limited tax GO refundings, ranged from 1.59% with a 4% coupon in 2017 to 3.87% with a 5% coupon in 2023.

The third series of $2.5 million of unlimited tax GOs, maturing in 2015, were offered via sealed bid.

Yields on the fourth series of $35.9 million of unlimited tax GO refundings for the Harbor Facilities alternative revenue source ranged from 1.06% with a 4% coupon in 2016 to 4.00% with a 5% coupon in 2024. Bonds maturing in 2015 were offered via sealed bid.

Wednesday, yields on the Municipal Market Data scale ended as much as two basis points higher. The 10-year yield rose one basis point to 2.80. The 30-year was steady at 4.33% and the two-year finished flat at 0.43% for the 21st consecutive session.

Yields on the Municipal Market Advisors scale also ended as much as two basis points higher. The 30-year yield increased two basis points to 4.42%. The 10-year was steady at 2.95% and the two-year was unchanged at 0.54% for the sixth session.

Treasuries were weaker Thursday afternoon, though pared some losses from the morning session. The benchmark 10-year yield rose six basis points to 2.77% and the 30-year yield climbed five basis points to 3.80%. The two-year yield rose two basis points to 0.35%.

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