Markets

The Moody's Investors Service downgrades of Ambac Assurance Corp. and Berkshire Hathaway Assurance Corp. this month highlight the new paradigm for insured municipal bond funds. They are now not all that different from plain muni funds.

After 25 years in the municipal bond industry, senior portfolio manager Ronald H. Fielding — one of the longest-serving investors in the industry and a pioneer investing in tobacco bonds — has announced that he will retire from OppenheimerFunds Inc. effective May 20.

Thornburg Investment Management this month launched a high-yield municipal bond fund seeking to take advantage of distressed prices on what the company claims are fairly stable credits.

The new-issue calendar will be somewhat lackluster this week with an estimated $3.75 billion of competitive and negotiated volume expected to arrive, compared with last week when issuers priced a revised $2.79 billion ahead of the Passover and Easter holidays, according to Thomson Reuters.

Municipal bond mutual funds kept attracting cash last week as investors continued to embrace state and local government debt.

After nearly a month of consistent outflows, tax-exempt money market funds managed to gain $1.79 billion and settle at $484.36 billion in total assets for the week ending April 6, according to the Money Fund Report, a service of iMoneyNet.com.

Participants in the municipal bond market say they are seeing more investors buy bonds from other states despite the tax exposure as fatter yields outweigh in-state tax considerations.

SAN FRANCISCO - Moody's Investors Service assigned a negative outlook to the entire tax-backed local government sector yesterday. It is the first time the agency has ever had a negative outlook on the sector.

Management fees for many municipal bond mutual funds have jumped this year because of the drainage of fund assets at the end of last year.

A slate of new offerings - anchored by a pair of deals from New York and California issuers - is expected in the municipal market this week. While the total is considerable, the size of the deals will be in stark contrast to the multibillion dollar issues the market digested over the past two weeks.