Trading of Puerto Rico Highways and Transportation Authority bonds continued to weaken Friday afternoon as traders noted default scares also spread to other bonds within Puerto Rico.

"Before the highway news, the bids we were getting on our small Puerto Rico bonds were not that good," a New York trader said. "We don't own the general obligation bonds or the highways, but all the names were getting caught in the wake."

Municipal bond scales ended stronger Thursday after posting mostly losses throughout the week.

Yields on the Municipal Market Data triple-A GO scale finished as much as three basis points lower. The two-year yield fell one basis point to 0.28% and the 30-year yield slid two basis points to 2.87%. The 10-year finished steady at 1.75% for the third session.

Yields on the Municipal Market Advisors 5% scale ended as much as two basis points lower. The 30-year yield dropped one basis point to 3.01%. The 10-year was steady at 1.80% for the second session and the two-year finished unchanged at 0.32% for the 24th session.

Treasuries continued to weaken Friday. The benchmark 10-year yield increased eight basis points to 1.90% and the 30-year yield spiked 11 basis points to 3.10%. The two-year yield rose two basis points to 0.25%.

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