The tax-exempt market continued to weaken Wednesday, although traders noted activity was busier than earlier in the week.

"There is a bit of action," a New York trader said. "It's spotty though and a bit weaker."

In the primary market Wednesday, JPMorgan and Wells Fargo Securities held a second day of retail for $10 billion of California revenue anticipation notes, rated MIG-1 by Moody's Investors Service, SP-1-plus by Standard & Poor's and F-1 by Fitch Ratings. Institutional pricing is expected Thursday. Pricing details were not available by press time.

In the first retail order period Tuesday, bonds in the first series of $2.5 billion yielded 0.30% to 0.40% with a 2.5% coupon in 2013. Other portions of credits maturing in 2013 were not offered for retail.

Bonds in the second series of $7.5 billion yielded 0.40% to 0.55% with a 2.5% coupon in 2013.

Retail investors placed about $2.31 billion of orders out of the $10 billion on the first day of retail pricing, according to a spokesman for the California state treasurer's office.

Outside the biggest deal, Bank of America Merrill Lynch sold $777 million of Energy Northwest, Wash., Columbia generating station electric revenue bonds. The credit is rated Aa1 by Moody's, AA-minus by Standard & Poor's, and AA by Fitch. Prices were not available.

Barclays priced $125.7 million of Southern California Public Power Authority tax-exempt and taxable bonds in four series, rated AA-minus by Standard & Poor's and Fitch. Pricing details were not yet available.

On Tuesday, the 10-year Municipal Market Data yield climbed four basis points to 1.80%, while the 30-year yield rose three basis points to 2.95%. The two-year finished unchanged at 0.29% for the 14th straight session.

Treasuries continued their downward fall as yields climbed higher. The benchmark 10-year yield and the 30-year yield spiked up eight basis points each to 1.81% and 2.91%, respectively. The two-year yield jumped one basis point to 0.30%.


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