NEW YORK – The tax-exempt market was taking a breather after Monday and Tuesday’s rally. Faced with rising yields from Treasuries, muni bonds were noticeably weaker from earlier in the week.

“Munis still feel weak,” a New York trader said, adding the market was not going one specific direction.

But, munis were slightly weaker Wednesday early afternoon, according to the Municipal Market Data scale. Yields inside seven years were steady while yields outside eight years rose one to two basis points.

On Tuesday, the two-year yield closed steady at 0.33%. The 10-year yield and the 30-year yield each fell three basis points to 1.94% and 3.32%.

Treasuries were weaker. The two-year yield rose one basis point to 0.30%. The benchmark 10-year yield jumped four basis points to 2.03% while the 30-year yield increased five basis points to 3.18%.

In the primary market, Morgan Stanley held its second day of retail for the largest deal of the week, $1.3 billion of California various purpose general obligation bonds, rated A1 by Moody’s Investors Service and A-minus by Standard & Poor’s. In the first retail order period, individual investors bought $329 million of bonds, or about 25% of the total offering.

Yields on the first series, $890 million of new money for infrastructure projects, ranged from 0.68% with a 3% coupon in 2014 to 4.45% with a 4.375% coupon in 2042. Credits maturing in 2035 and portions of 2042 were not offered for retail. The bonds are callable at par in 2022. Yields were unchanged from the first retail order period.

Yields on the second series, $410.2 million of refunding bonds, ranged from 0.68% with 3% and 4% coupons in a split 2014 maturity to 3.17% with a 5% coupon in 2024. Portions of credits maturing in between 2014 and 2022 were not offered for retail. The bonds are callable at par in 2022. Yields were unchanged from the first retail pricing.

Barclays Capital was expected to hold a second day of retail but moved up its institutional order period on $472 million of Connecticut taxable and tax-exempt general obligation bonds, as well as SIFMA index bonds. The credit is rated Aa3 by Moody’s and AA by Standard & Poor’s and Fitch Ratings. Pricing information was not yet available.

In retail pricing Tuesday, the first series, $212.4 million of SIFMA index bonds, were not offered for individual investors. The second series, $259.6 million of GOs, ranged from 2.02% with 3%, 4%, and 5% coupons in a split 2021 maturity to 3.49% with 3.5% and 4% coupons and 3.24% with a 5% coupon in a split 2032 maturity. Portions of credits maturing in 2025 to 2029 and in 2031 were not offered for retail.

Siebert Brandford Shank & Co. priced $219.1 million of Pennsylvania Turnpike Commission revenue bonds in two series.

The first series, $123.7 million of turnpike subordinate revenue bonds, is rated A3 by Moody’s and A-minus by Standard & Poor’s and Fitch. Yields ranged from 0.95% with a 3% coupon in 2013 to 4.46% with a 5% coupon in 2042. The bonds are callable at par in 2021.

The second series, $95.4 million of motor license fund enhanced turnpike subordinate special revenue bonds, is rated Aa3 by Moody’s and AA by Fitch. Yields ranged from 0.60% with a 2% coupon in 2013 to 3.94% with a 5% coupon in 2042. The bonds are callable at par in 2021.

In the competitive market, Citi won the bid for $211.4 million and $50.9 million of Maryland Transportation Authority revenue bonds, rated A2 by Moody’s, A by Standard & Poor’s, and A-minus by Fitch. Prices were not yet available.

In the secondary market, trades reported by the Municipal Securities Rulemaking Board showed firming over the past week.

A dealer sold to a customer Michigan 2.125s of 2018 at 2.03%, 19 basis points lower than where they traded last Thursday.

A dealer bought from a customer Dormitory Authority of the State of New York 5s of 2039 at 3.61%, 15 basis points lower than where they traded last Thursday.

A dealer bought from a customer Airport Commission of the City and County of San Francisco 5s of 2027 at 3.37%, seven basis points lower than where they traded Monday.

A dealer sold to a customer Delaware 5s of 2017 at 0.83%, three basis points lower than where they traded last week.

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