Markets

Pennsylvania, the latest state to issue unemployment compensation revenue bonds, plans to go to market Monday and Tuesday with $2.6 billion.

Continuing last week's outflow pattern, tax-exempt money market funds lost $1.49 billion as total net assets declined to $268.31 billion in the week ended Sept. 24, according to The Money Fund Report, a service of iMoneyNet.com.

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.

Strong demand for municipal bonds buoyed prices throughout the week. Muni Bond Buyer indexes fell noticeably, reflecting the lower rates.

Investor demand outlasted the end-of-summer doldrums with robust inflows to municipal bond mutual funds. But the past week saw those flows to weekly reporting funds fall to more modest levels, $256 million in inflows for the week ended Sept. 19.

Fitch Ratings is negative on localities and expects an increase in their defaults and bankruptcies.

After garnering over $1 billion that ended a nearly month-long, outflow pattern last week, tax-exempt money market funds were back in negative territory this week as they lost $449.9 million and total net assets settled at $269.80 billion for the week ended Sept. 17, according to The Money Fund Report, a service of iMoneyNet.com.

Moody's Investors Service is maintaining its negative outlook on U.S. states' credit.