Markets

On the heels of a month-long rally in the municipal bond market, some yield-seeking institutional and retail investors are turning to riskier credits to get their fix.

Outflows from municipal bond mutual funds may be coming to an end, depending on where one looks for U.S. fund flow numbers.

Despite attractive borrowing rates, issuers continue to hold back, with new-issue volume slipping for a third week, putting it on schedule to be the fourth-slowest so far this year.

Municipal bond mutual funds had net outflows of $108 million in the week ended May 18, according to Lipper FMI.

The influx of cash into tax-free money market funds last week proved to be short-lived as assets fell $914.9 million to $309.04 billion for the week ended May 16, according to the Money Fund Report, a service of iMoneyNet.com.

The popularity of direct loans and purchases of variable-rate debt continues to grow. But as more bank credit facilities for VR debt come due this year for municipal issuers, the alternative financing products present numerous risks that issuers must monitor, according to a new report by Standard & Poor’s.

New muni issuance is edging up.

Reversing a trend of outflows, tax-exempt money market funds raked in $3.33 billion to end the week of May 9 with $309.95 billion in total net assets, according to the Money Fund Report, a service of iMoneyNet.com.