It is now the country's leading insurer of municipal securities.

"And after 15 years of underwriting more than 12,000 municipal securities, we have never had a loss," he said.

Activity in the secondary market for municipal securities was fairly light, the traders said.

A. If federal taxes were lowered, then the tax exemption on a municipal security becomes less attractive.

Activity in the secondary market for corporate and tax-exempt municipal securities was light, with little or no price movement.

In the secondary market for tax-exempt municipal securities, prices of most issues rose by about 1/8 point, dealers said.

Prices were little changed in the secondary market for corporate and tax-exempt municipal securities yesterday.

Including tax-exempt funds, which buy short-term municipal securities, total assets are about $530 billion.

Activity was also sluggish in the secondary market for tax-exempt municipal securities.

With supply drying up, municipal securities are growing more attractive than Treasury bonds to many.