Pennsylvania auctioned $950 million of general obligation bonds, which Bank of America Merrill Lynch won, and traders said the deal was very well received.

The bonds are rated Aa2 by Moody's Investors Service, AA by Standard & Poor's, and AA-plus by Fitch Ratings. Yields ranged from 0.17% with a 1% coupon in 2014 to 3.34% with a 4% coupon in 2033. The bonds are callable at par in 2023.

"Pennsylvania did well and there is more depth today than anytime over the last week," a Pennsylvania trader said.

A New York trader said spreads came in tighter than where the bonds were trading earlier in the week in the secondary market. "There is a strong number on Pennsylvania compared to where it was trading. There are definitely buyers out there."

Other larger negotiated deals started to price.

Bank of America Merrill Lynch priced $201.5 million of Missouri Health and Educational Facilities Authority revenue bonds, rated A2 by Moody's and A by Fitch. Yields ranged from 1.00% with a 3% coupon in 2016 to 4.24% with a 5% coupon in 2048. The bonds are callable at par in 2023.

Barclays priced $182.5 million of WPPI Energy power supply system revenue bonds, rated A1 by Moody's, A by Standard & Poor's, and A-plus by Fitch. Yields ranged from 0.54% with a 3% coupon in 2015 to 4.05% with a 4% coupon and 3.65% with a 5% coupon in a split 2037 maturity. The bonds are callable at par in 2023.

On Tuesday, municipal bond scales ended steady to one basis point weaker after finishing two basis points stronger Monday.

Yields on the Municipal Market Data triple-A GO scale ended steady across the curve. The 10-year yield closed flat at 1.89% for the second session while the 30-year yield held steady at 3.09% for the fourth session. The two-year finished flat at 0.31% for the 30th consecutive session.

Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale ended steady to one basis point weaker. The 10-year and 30-year yields increased one basis point each to 1.95% and 3.19%, respectively. The two-year held at 0.33% for the 25th session.

Treasuries continued to strengthen Wednesday afternoon. The benchmark 10-year yield and 30-year yield plunged five basis points each to 1.82% and 3.06%, respectively. The two-year yield slid two basis points to 0.23%.

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