Markets

Sophisticated investors are grabbing for high-yield municipal debt whenever they can find it, creating demand for alternatives beyond the Puerto Rico, Detroit, and tobacco bonds that dominate the non-investment grade segment of the secondary market.

Foreign investors' buildup in U.S. municipal bond holdings has heightened significance in the current low-supply high-demand market environment, in which an emerging group of buyers could cause competition for the limited amount of bonds available to spike.

Inflows to municipal bond funds dropped by 58% in the week ending Sept. 17.

The weekly average yield to maturity of the Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, was unchanged the week of Sept. 18 at 4.46%.

Moments after Janney Capital Markets cited "cracks" in the foundation of state credit quality nationwide, Pennsylvania said it would have to loan money to itself to keep running.

Municipal bond fund managers are finding they can stand out from the competition and lure new investors by taking advantage of this year's flood of green bonds.

Standard & Poor's has put the ratings of two double-A level not-for-profit health systems in Illinois, Advocate and NorthShore, on Credit Watch with positive credit implications following their announcement to join forces.

A $481 million San Francisco Airport Commission sale will lead the activity in the primary market this week as part of an estimated $6 billion of new-issue volume - the highest estimated volume in almost three months.

Increasing popular kicker bonds may seem like a sure bet for investors, but analysts warn the growing demand for the bonds is increasing their risk.

Inflow to municipal bond funds increased even though municipal bonds sold off most of the week.