Tax-exempt yields climbed again yesterday amid light to moderate secondary market activity, as Los Angeles County priced a $1.3 billion note sale.In the new-issue market, Merrill Lynch & Co. priced $1.3 billion of tax and revenue anticipation notes for Los Angeles County. The Trans mature in 2010, yielding 0.80% with a 2.5% coupon. The credit is rated MIG-1 by Moody’s Investors Service, SP-1 by Standard & Poor’s, and F1-plus by Fitch Ratings.

Traders said tax-exempt yields in the secondary were higher by about three basis points overall.

“We’re down again,” a trader in New York said. “There’s not really much motivation to do anything in the secondary right now. We’re probably off a good three basis points at this point. It’s like if you don’t need to move paper, then there’s no reason to get involved until something changes out there.”

“We’re definitely cheapening up again,” a trader in San Francisco said. “There’s still not a whole lot of trading going on; it’s noticeable. We’re probably off three, maybe four basis points.”

Final pricing details were released on the Puerto Rico Sales Tax Financing Corp.’s $4.1 billion revenue bond deal, which Citi priced for institutional investors Wednesday. The deal, originally slated to be $3.5 billion, was upsized to $4.5 billion during the retail order period early this week, before being shaved down to $4.1 billion during Wednesday’s institutional pricing.

Bonds from the larger $2.9 billion series mature from 2015 through 2029, with term bonds in 2037, 2039, 2042, and 2044. Yields range from 3.75% priced at par in 2015 to 6.10% with a 6.5% coupon in 2044. The bonds are callable at par in 2019, except bonds maturing in 2029, which are callable at par in 2014. Bonds from a $700 million series mature in 2039, yielding 5.00% priced at par, with a mandatory tender in 2011.

Bonds from a $139.2 million series of capital appreciation bonds mature in 2030, 2031, and 2034, subject to a make-whole call on or after Aug. 1, 2014. A $342.8 million series of convertible CABs matures in 2032. The credit is rated A2 by Moody’s, A-plus by Standard & Poor’s, and A by Fitch.

The Treasury market showed gains yesterday. The yield on the benchmark 10-year note, which opened at 3.94%, was quoted near the end of the session at 3.86%. The yield on the two-year note was quoted near the end of the session at 1.33% after opening at 1.35%. The yield on the 30-year bond, which opened at 4.76%, was quoted near the end of the session at 4.69%.

As of Wednesday’s close, the triple-A muni scale in 10 years was at 83.8% of comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were 99.6% of comparable Treasuries. Also, as of the close Wednesday, 30-year tax-exempt triple-A general obligation bonds were at 104.4% of the comparable London Interbank Offered Rate.

The Treasury Department yesterday auctioned $11 billion of 30-year bonds with a 4.25% coupon at a 4.720% high yield and a price of about 92.50. The bid-to-cover ratio was 2.68. Federal Reserve banks also bought $116.3 million for their own account in exchange for maturing securities.

In other new-issue market activity, JPMorgan priced $150 million of taxable revenue bonds for the Rhode Island Economic Development Corp. The bonds mature from 2010 through 2018, with yields ranging from 3.78% in 2011 to 6.17% in 2018, all priced at par. Bonds maturing in 2010 and 2011 were decided via sealed bid. The bonds, which are not callable, are rated A1 by Moody’s, AA-minus by Standard & Poor’s, and A-plus by Fitch.

Morgan Stanley priced $139.6 million of revenue bonds for the California Health Facilities Financing Authority. The bonds mature from 2010 through 2015, with term bonds in 2021, 2024, 2029, and 2038. Yields range from 2.80% with a 3% coupon in 2010 to 6.70% with a 6.5% coupon in 2038. The bonds, which are callable at par in 2019, are rated A by both Standard & Poor’s and Fitch.

Citi priced $40.8 million of utilities systems revenue refunding bonds for Concord, N.C. The bonds mature from 2009 through 2022, with yields ranging from 0.78% with a 3% coupon in 2009 to 4.55% with a 5% coupon in 2022. The bonds , which are callable at par in 2019, are rated A1 by Moody’s and AA-minus by both Standard & Poor’s and Fitch.

Also, Nantucket, Mass., competitively sold $26.7 million of bond anticipation notes to Morgan Stanley with a net interest cost of 0.48%. The Bans mature in 2010, with a 1.5% coupon. The credit is rated MIG-1 by Moody’s.

In economic data released yesterday, initial claims for state unemployment benefits fell by 24,000 to 601,000 in the week ending June 6. A Thomson Reuters survey had expected the initial claims level to drop to 615,000. Continuing claims during the week ending May 30 was 6.816 million, an increase of 59,000 from the preceding week’s revised level of 6.757 million.

Retail sales climbed 0.5% in May, after a revised 0.2% drop the previous month. Economists polled by Thomson Reuters had predicted a 0.5% rise. Excluding autos, retail sales rose 0.5% in May. Economists polled by Thomson Reuters had predicted a 0.2% climb.

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