The tax-exempt market climbed higher Tuesday after a slow Monday as traders said the market was busy putting money back to work.

Market participants are taking advantage of the large primary deals hitting the market this week as well as buying in the secondary.

"There are a couple of primary deals in California and also a ton of bids-wanted," a Los Angeles trader said. "Crowds are back from Thanksgiving and there is a small window between business getting done for the next three weeks before the market shuts down again."

He added primary deals are going well and there are plenty of buyers to meet the selling pressure in the secondary as traders look to lock in gains.

"People are looking to lock in profits and take gains in a big way before taxes go up. Tax levels are going to go up next year and we are seeing tax swap gain trades because of that. We are seeing huge blocks out with big institutional accounts and retail is involved in those trades as well."

In the primary market, Bank of America Merrill Lynch priced for retail $792.4 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. Institutional pricing is expected Wednesday. Pricing details weren't available by press time.

B of A Merrill priced for retail $491.6 million of Lower Colorado River Authority refunding revenue bonds, rated A1 by Moody's and A by Standard & Poor's and Fitch. Institutional pricing is expected Wednesday.

The first series of $289.5 million was not offered for retail.

Yields on the second series of $202.1 million, ranged from 0.50% with a 3% coupon in 2014 to 3.52% with a 3.50% coupon in 2037. Bonds maturing in 2013 were offered via sealed bid. Credits maturing between 2026 and 2028, in 2031, 2032, and portions of 2037 were not offered for retail. The bonds are callable at par in 2022.

B of A Merrill priced $152.8 million of Lehigh County General Purpose Authority hospital revenue bonds for the Lehigh Valley Health Network. The bonds are rated A1 by Moody's and A-plus by Standard & Poor's.

Yields ranged from 0.50% with a 2% coupon in 2013 to 3.83% with a 4% coupon in 2043. The bonds are callable at par in 2022.

Jefferies & Co. priced for retail $110.7 million of Indiana Finance Authority state revolving fund program bonds, rated triple-A.

Yields ranged from 1.08% with a 3% coupon in 2020 to 2.54 with a 4% coupon and 2.31% with a 5% coupon in a split 2032 maturity. The bonds are callable at par in 2023.

In the competitive market, Barclays won the bid for $279.2 million of University of Washington revenue bonds, rated Aaa by Moody's and AA-plus by Standard & Poor's. The bonds have maturities ranging from 2013 to 2043. Prices were not available by press time.

The Municipal Market Data scale continued to strengthen Monday, setting fresh record lows. The 30-year MMD yield fell two basis points to 2.52%, setting a record low. It beat the previous record of 2.54% set Nov. 16.

The 10-year yield also fell two basis points to 1.51%, hovering just one basis point above the record low of 1.50% set Nov. 16.

The two-year finished steady at 0.30% for the 41st consecutive trading session.

Yields have fallen dramatically since the beginning of the month. Over the course of November, the 10-year MMD yield has fallen 21 basis points from where it started at 1.72% while the 30-year yield has fallen 30 basis points from where it started the month at 2.82%.

Treasuries were slightly stronger Tuesday afternoon. The benchmark 10-year yield and the 30-year yield fell one basis point each to 1.65% and 2.79%, respectively. The two-year yield also fell one basis point to 0.27%.

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