James Ramage

As a veteran with 26 years of experience in munis, Guggenheim Partners' Jim Pass talks about investment strategy, political risk, and what he's seeing in the market.

The municipal bond market adopted a slightly weaker tone this week. Muni indexes mostly followed tax-exempt and Treasury yields higher.

Regions Financial Corporation bolstered the customer service staff of its corporate trust group by appointing Patti A. Maner vice president and senior relationship manager.

The past week may have been an otherwise lackluster one for the tax-exempt market, but municipal bond mutual funds saw heavy demand in the form of inflows. Funds that report their flows weekly recorded inflows of $915 million for the week ended Oct. 10.

Investors' attitudes towards premium bonds have changed. They realize that they are at the bottom of the interest-rate cycle and facing a potentially volatile period in the markets. So they are adopting a defensive stance with the muni bonds they are buying.

The municipal market managed to mostly tread water during a holiday-shortened week. Muni bond indexes mostly rose on the week, indicating slightly weaker rates.

Estimates for municipal bond volume are expected to ratchet up this week. An anticipated $8.26 billion in long-term bonds should reach the market, versus a revised $7.54 billion last week.

Municipal bond mutual funds saw inflows for a 25th straight week. Funds that report their flows weekly recorded inflows of $553 million for the week ended Oct. 3, Lipper FMI numbers show.

Strong reception to new issues fueled the municipal market early in the week, while solid activity in the secondary market pressured yields midweek. Muni bond indexes covering all but the short end fell on the week, reflecting the fall in intermediate and long-term rates.

Municipal bond software vendor Lumesis, Inc. brought aboard Robin Wiessmann and Michael Vossler to provide expertise in public finance and business development. They are expected to shore up the cloud-based financial technology firm's position in the marketplace for technology that serves the muni bond industry.

Panelists at the SIFMA Municipal Bond Summit agreed that the indices municipal bond participants use have proven functional for various forms of pricing. But they're not ideal for a market that desperately needs an effective hedging tool and a more accurate way to price bonds in an environment where transactions and numbers are limited.

Ron Schwartz is director of the tax-exempt portfolio management at StableRiver Capital Management. He has managed the firm's High-Grade Municipal Bond and the Investment Grade Tax-Exempt Bond funds both since inception.

Anticipated municipal market issuance has leveled off for a third consecutive week. Potential volume for the week is expected to total $7.45 billion, down a couple of ticks from sales of $7.47 billion last week.

Municipalities eased off the throttle last month, marking the first break this year for increases in new issuance. Long-term muni bond volume for September fell 9% from the same period in 2011.

Municipal bond mutual funds saw heightened demand from investors this past week. Funds that report their flows weekly recorded solid inflows of $592 million for the week ended Sept. 26, Lipper FMI numbers show.

Strong reception to new issues on Monday and Tuesday and secondary activity on Thursday propelled the municipal market to a week of falling yields at the intermediate and long ends of the curve.

A sturdy reception of California's large general obligation offering marked a strong start to the week for the municipal market. Despite the momentum the California GOs created, muni yields mostly held their levels on the day.

A solid reception for the week's second largest deal during its retail order period has the market feeling stronger Monday. California various purpose GO and refunding bond prices for retail were adjusted to two basis points firmer in the belly of the curve from Friday.

Traders are nibbling around the edges of the municipal market Monday morning in anticipation of a decent week of new issuance set to arrive in the coming days.

Municipal bond investors can expect another week of relatively solid issuance. Potential volume is expected to total $7.70 billion, up from sales of $7.36 billion last week.