Markets

The tide of money washing over municipal bond mutual funds eased up a touch last week.

The California municipal market is gearing up for a week of brisk activity as the state plans to sell $4.5 billion of general obligation debt — including Build America Bonds — while two other issuers ready sizable offerings.

Two of The Bond Buyer’s weekly yield indexes declined to 40-year lows this week as yields dropped slightly in all the week’s sessions.

After experiencing a one-week decline of $5.90 billion, tax-exempt money market funds ended the week of Sept. 28 with $423.01 billion in total assets as the market prepared to close the books on the third quarter, according to the Money Fund Report, a service of iMoneyNet.com.

Dwindling yields on municipal bonds have done nothing to deter investors from continuing to sock away unparalleled sums of cash into municipal bond mutual funds.

The official start of the fourth quarter will be marked by some brisk new-issue activity this week as several large financings - led by two significantly sized Build America Bond deals in California and New York - come to market.

The Bond Buyer’s weekly yield indexes again fell this week, extending a string of declines seen over several weeks and recording an all-time low on the one-year index.

Invesco Powershares is preparing to launch an exchange-traded fund linked to Build America Bonds, fusing two of the hottest ideas in public finance.

It is now prohibited for the New York State Common Retirement Fund (CRF) to enter into business with investment advisors who have made political contributions to the state’s comptroller or a candidate for state comptroller.