The municipal market somewhat stabilized yesterday, as yields remain unchanged following a sell-off of up to 10 basis points in spots Wednesday that continued a week-long pattern of rising yields.

“We’re pretty flat right now,” a trader in New York said. “We’ve given back a lot of the gains we made the previous few weeks over the past week or so of rising yields, and perhaps now we’ve reached a point where we’re going to level off a bit. We sold off pretty heavily yesterday, especially in the 10 or so year range. Right now though, there’s some activity, but there’s pretty much no movement. It’s just totally flat right now.”

“We’ve sort of leveled off,” a trader in Los Angeles said. “We had a pretty decent sell-off the past week or so, but today that sell-off just sort of stopped in its tracks, and you might even say we’re a little better in spots, maybe a slight firmer tone, depending on the credit though. Either way, I’m not seeing any weakness out there today.”

In the new-issue market, Washington issued a press release announcing details of the sale of $500 million of taxable Build America Bonds, to go along with its $566.7 million of competitive offerings Wednesday.

Goldman, Sachs & Co. and JPMorgan were senior managers. According to the release, the sale “provided the state with an effective true interest cost of 3.52%.”

Yesterday Morgan Stanley priced $335.7 million of taxable general obligation bonds for Mississippi. The bonds mature from 2010 through 2020, with a term bond in 2029.

Yields range from 0.55% in 2010 to 5.54% in 2029, all priced at par. Bonds maturing from 2010 through 2020 are subject to make-whole redemption at Treasuries plus 15 basis points.

Bonds maturing in 2029 are subject to make-whole redemption at Treasuries plus 20 basis points.

Bonds were priced to yield between 60 and 125 basis points over the comparable Treasury yield.

The state also sold $98.3 million of taxable BABs, priced by Morgan Keegan & Co., which mature in 2034 and yield 5.67% priced at par, or 3.68% after the 35% federal subsidy.

The bonds were priced to yield 138 basis points over the comparable Treasury yield.

Morgan Keegan also priced $64.4 million of tax-exempt debt for Mississippi, which matures from 2020 through 2023, with yields ranging from 3.61% with a 5.25% coupon in 2020 to 3.85% priced at par in 2023. The bonds are not callable.

The bonds are rated Aa3 by Moody’s Investors Service and AA by both Standard & Poor’s and Fitch Ratings.

Barclays Capital priced $167 million of tax-exempt health system revenue bonds for Pennsylvania’s Lycoming County Authority. The bonds mature from 2010 through 2021, with term bonds in 2023, 2028, and 2039.

Yields range from 2.41% with a 4% coupon in 2010 to 5.90% with a 5.75% coupon in 2039. The bonds, which are callable at par in 2019, are rated BBB-plus by Standard & Poor’s and A-minus by Fitch.

Loop Capital Markets priced $146.2 million of tax-exempt state trunk-line fund and refunding bonds for Michigan.

The bonds mature in 2017, and from 2019 through 2026, with yields ranging from 4.02% with a 3.75% coupon in 2017 to 4.58% with a 5% coupon in 2026. The bonds, which are callable at par in 2019, are rated Aa3 by Moody’s and AA-plus by Standard & Poor’s.

On Wednesday, because of rising rates, Hawaii and underwriter Merrill, Lynch & Co. pulled the $632 million refunding component out of a planned general obligation deal.

However, the state did price $32 million of  qualified school construction tax-credit GO bonds as well as $41 million in certificates of participation.

 The $32 million series matures from 2016 through 2024, with yields ranging from 0.20% in 2016 to 1.45% in 2024, all priced at par. Bonds maturing in 2014 and 2015 were not reoffered.

The $41 million series matures from 2010 through 2020, with yields ranging from 1.37% with a 2% coupon in 2010 to 4.03% with a 4% coupon in 2020.

The Treasury market showed losses yesterday. The yield on the benchmark 10-year note, which opened at 3.42%, was quoted near the end of the session at 3.46%.

The yield on the two-year note was quoted near the end of the session at 0.96% after opening at 0.91%. The yield on the 30-year bond, which opened at 4.26%, was quoted near the end of the session at 4.30%.

The Municipal Market Data triple-A scale yesterday yielded 3.04% in 10 years and 3.74% in 20 years, following levels of 3.05% and 3.66%, respectively, on Wednesday. The scale yielded 4.09% in 30 years, matching Wednesday’s level.

As of Wednesday’s close, the triple-A muni scale in 10 years was at 90.0% of comparable Treasuries, according to MMD, while 30-year munis were 96.9% of comparable Treasuries.

Meanwhile, 30-year tax-exempt triple-A rated general obligation bonds were at 98.3% of the comparable London Interbank Offered Rate.

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