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Puerto Rico's planned debt issue may still find demand among mutual funds after the commonwealth was cut to a junk grade by Standard & Poor's, even though some fund managers are restricted from buying speculative paper.

Fitch Ratings said Thursday that it expects a gradual unwinding or restructuring of tender option bond programs over the next few months since they were not exempted from the Volcker Rule.

Bond Buyer indexes were mixed the first week of February.

Labor market slack data show the U.S. economy remains "very far from historical average levels of labor utilization," and therefore monetary policy should stay highly accommodative, Federal Reserve Bank of Boston President & Chief Executive Officer Eric S. Rosengren said Thursday.

Illinois put a price tag of $60 million on the savings on its $1 billion general obligation sale Thursday attributed largely to investors rewarding the state for a recently enacted pension overhaul.

The spread between Illinois general obligation bonds issued Thursday over benchmark 10-year AAA bonds was narrower than the last time the pension-burdened state came to market with tax-exempt bonds.

Government

Sen. Max Baucus, the outgoing chairman of the Senate Finance Committee, was unanimously confirmed by the Senate on Thursday as U.S. Ambassador to China.

Heavily tolled residents and commercial drivers on Staten Island who use New York City's Verrazano-Narrows Bridge will get a break, Gov. Andrew Cuomo said.

Pension costs will still be growing for many local governments 2014 even though adjusted net pension liabilities are lower, Moody's Investors Service said in a report issued this week.

Newly issued Treasury securities held in stripped form increased about $2.379 billion in January to a total of $207.035 billion, the Bureau of the Public Debt reported Thursday.

Metropolitan Washington Airports Authority picks four finalists for next phase of $5.7 billion light rail extension to Dulles International Airport.

The Securities and Exchange Commission's muni office will spend the coming months implementing the final municipal advisor rule and reviewing MA rule filings by the Municipal Securities Rulemaking Board, but the commission needs more resources to meet its expanded responsibilities.

S&P revised the outlook to negative on CCC-rated bonds for South Carolina's Tuomey Healthcare due to a $277 million fraud judgment and operating losses.

Municipal mutual funds reported $227.3 millon of net outflows, ending three-week run of inflows, Lipper FMI reported Thurday.

Moody's Investors Service downgraded the rating of Lancaster, Calif.-based Antelope Valley Hospital District to junk, maintaining a negative outlook

The market for tax-exempt municipal bonds was slow Thursday afternoon, as some market participants said bond prices remained unattractively high.