The municipal market was slightly firmer Monday as California priced a $1.125 billion tax-exempt general obligation offering, accelerating institutional pricing on the deal by a day.

“There’s definitely some firmness out there,” a trader in Los Angeles said. “It’s not quite as active as it’s been the past week, but we’re better a solid three, maybe four, basis points across the board. Probably closer to four on the long end. There’s a pretty wide bid-ask spread holding trading back somewhat, but business is still getting done.”

In the new-issue market Monday, RBC Capital Markets priced $1.125 billion of various-purpose GOs for California.

The bonds mature in 2011 and from 2013 through 2030, with term bonds in 2035 and 2040. Yields range from 1.90% with a 3% coupon in 2013 to 5.50% with a 5.25% coupon in 2040. Bonds maturing in 2011 were decided via sealed bid.

The deal was originally set to be priced for institutional investors Tuesday, with a two-day retail order period concluding Monday. However, after 84% of the deal was gobbled up by retail investors Friday, the size of the deal was increased by $125 million and the institutional pricing was accelerated by one day.

More retail orders were taken Monday, concluding with $987.3 million in total orders before pricing the debt for institutions late Monday.

Monday’s tax-exempt issuance follows a week in which the state brought $13.275 billion to market over two issues. Last week, California priced $10 billion of revenue anticipation notes Thursday, followed by $3.275 billion of taxable debt Friday, including $3.025 billion of taxable Build America Bonds.

The acceleration of the tax-exempt pricing follows the one-day delays of both of last week’s offerings. Pricing was delayed so the issuer could disclose a lawsuit filed last Tuesday.

Amid sharply rising municipal yields prompted by overall weakness and heavy supply, California officials last Wednesday scaled back the tax-exempt issuance to $1 billion from $1.75 billion, allocating the remainder to the BAB sale.

The bonds, which are callable at par in 2020, are rated A1 by Moody’s Investors Service and A-minus by both Standard & Poor’s and Fitch Ratings.

The Municipal Market Data triple-A scale yielded 2.87% in 10 years Monday, down four basis points from Friday’s 2.91%, while the 20-year scale yielded 4.02%, down three basis points from Friday. The scale for 30-year debt dropped four basis points to 4.36% Monday from 4.40% Friday.

Monday’s triple-A muni scale in 10 years was at 102.5% of comparable Treasuries and 30-year munis were at 103.8%, according to MMD. Meanwhile, 30-year tax-exempt triple-A GOs were at 111.7% of the comparable London Interbank Offered Rate.

The Treasury market showed gains Monday. The benchmark 10-year note was quoted near the end of the session at 2.81% after opening at 2.87%. The 30-year bond was quoted near the end of the session at 4.21%, after opening at 4.24%. The two-year note was quoted near the end of the session at 0.48% after opening at 0.50%.

Secondary trading has experienced an uptick the past several sessions as buyers return to the market in droves to take advantage of attractive rates created by the sell-off that routed the market for the better part of the past two weeks.

The Municipal Securities Rulemaking Board reported 67,629 trades Friday, a day that is usually reserved for sparse trading, often below 20,000 in total. This figure beats by 10,000 the three-day average number of trades last Tuesday through Thursday.

The trades were completed on 16,416 different issues for total volume traded of $29.64 billion on Friday. The most actively traded bond was California 3s of 2011, which traded 14,643 times at a high of 101.235 and a low of 100.082.

The municipal market is expected to catch its collective breath this week as new volume tapers off by about $2.5 billion from the $7.25 billion of long-term new issuance that dominated the market last week, according to Ipreo LLC and The Bond Buyer.

New volume will recede to an estimated $4.39 billion, which is barely half of the $8.08 billion average for the 46 weeks so far this year, according to Thomson Reuters. Recent weekly volume has ranged from $12.91 billion during the week of Oct. 4 to $7.25 billion last week, according to the data.

On Monday, Goldman, Sachs & Co. took indications of interest on a $760.2 million offering of taxable BABs for the Los Angeles Department of Water and Power, another of the week’s largest new issues.

The BABs mature in 2044 and 2045, and are rated Aa3 by Moody’s and AA-minus by both Standard & Poor’s and Fitch.

Also, Citi on Monday priced for retail investors $749.5 million of transportation revenue bonds for New York’s Metropolitan Transportation Authority ahead of institutional pricing later this week. Maturities ranged from 2011 through 2030, with term bonds in 2035 and 2040. Yields ranged from 1.30% with a 2% coupon in 2012 to 5.375% priced at par in 2035. Bonds maturing from 2027 through 2030 and in 2040 were not offered during the retail order period.

The bonds, which are callable at par in 2020, are rated A2 by Moody’s, A by Standard & Poor’s, and A-plus by Fitch.

Elsewhere in Monday’s new-issue market, Wisconsin competitively sold $200 million of taxable and tax-exempt debt in two series.

A $123.9 million series of taxable BABs was sold to Robert W. Baird & Co. The BABs mature from 2022 through 2031, with coupons ranging from 4.7% in 2022, or 3.06% after the 35% federal subsidy, to 6% in 2031, 3.90% after the subsidy. None of the bonds were formally re-offered.

The $76.1 million tax-exempt series was won by JPMorgan. The bonds mature from 2012 through 2021, with yields ranging from 0.98% with a 5% coupon in 2013 to 3.30% with a 5% coupon in 2021. Bonds maturing in 2012 were not formally re-offered.

The credit is rated Aa2 by Moody’s and AA-plus by both Standard & Poor’s and Fitch.

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