Markets

Municipal bond mutual funds attracted another influx of new money last week as the pace of flows into the industry continued to stabilize.

The few sizable deals in the primary market this week — anchored by a $1.5 billion Texas Transportation Commission highway revenue financing — are expected to draw keen attention amid a summer supply shortage, according to underwriters and traders.

The Bond Buyer’s weekly yield indexes mostly declined this week, as a firmness permeated the market through each session.

Even as Build America Bonds continue to transform municipal finance, one thing stays constant: hedging a portfolio of muni securities remains very difficult.

Tax-exempt money market funds experienced outflows of $3.25 billion in the week ending July 19, nearly double the losses recorded the previous week, according to the Money Fund Report, a service of iMoneyNet.com.

George Friedlander has rejoined Citigroup as head of municipal strategy.

Two new Standard & Poor’s indexes tracking municipal bonds launched yesterday, paving the way for Vanguard to enter the municipal exchange-traded fund business.

Municipal bond mutual funds’ assets climbed to a new record total as they continue to command new money from investors in spite of low yields and a nonstop wave of bad headlines in the mainstream press over state and local government credit.

Volume is expected to increase slightly this week thanks to the arrival of several significantly sized financings in the long-term market. They include a large Florida airport deal, a pair of California utility offerings, and a trio of Northeast deals hailing from issuers in New York, Pennsylvania, and the District of Columbia.