Buy side

The revival in pension obligation bond issuance creates new risks for retirement systems that do not resolve chronic structural problems, rating analysts said.

Storm resilience could represent an ideal application for social impact bonds, some advocates say.

Moody’s Investors Service has downgraded more than three dozen Michigan school districts this year as falling enrollment continues to strain their finances.

Municipal volume is estimated to drop to $5 billion for the week of Aug. 10, with only 11 negotiated deals and no competitive sales larger than $100 million on the calendar.

Municipal bond funds suffered a second week of redemptions, according to the latest Lipper data. Funds which report weekly posted $308.245 million of outflows in the week ended Aug. 5, after experiencing outflows of $73.372 million in the previous week.

For the week ended August 6, the weekly average yield to maturity of the Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, decreased one basis point to 4.39%, from 4.40% the previous week.

Municipal issuers no longer consider bankruptcy to be taboo and distressed governments are increasingly likely to consider it an option, Moody's analysts said in a report.

Municipal credit quality deteriorated in the second quarter, reflecting fiscal problems in Puerto Rico, New Jersey and Chicago, according to Moody's Investors Service.

Within hours of the Obama Administration's release of the final Clean Power Plan on Monday, opponents vowed to take legal action to block the rule while others hailed the measure.

MacKay Shields forecast rising demand, a steep yield curve, volume growth, the return of monoline insurance, and outperformance in the tobacco sector for this year.

Municipal volume is expected to spike to $7.8 billion for the week of Aug. 3, with an almost billion dollar deal coming from the Pacific Northwest and five separate competitive issues from Minnesota totaling more than $1 billion.

Municipal bond funds suffered a reverse and saw outflows in the latest week, according to the latest Lipper data. Funds which report weekly saw $73.372 million of outflows in the week ended July 29, after seeing inflows of $125.410 million in the previous week. The prior week’s inflows were the first time in 12 weeks the funds had seen a cash infusion.

The weekly average yield to maturity of The Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, decreased four basis points to 4.40% for the week ended July 30 from 4.44% in the previous week.

S&P Dow Jones Indices on Wednesday launched two new indexes that will break out and track tax-exempt and taxable revenue bonds in existing S&P DJI indexes.

As fund flows turned positive for the first time in 12 weeks, analysts said the impact of Puerto Rico and Chicago on investor behavior may have been overstated, and that fund flows reflect only a corner of the municipal bond market.

Municipal volume is forecast to slip from what may turn out to be the peak of weekly issuance for the rest of the year.

For the week ended July 23, the weekly average yield to maturity of the Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, decreased four basis points to 4.44%, from 4.48% the previous week.

For the first time in 11 weeks, municipal bond funds reported cash inflows.

Municipal bond funds have reported outflows for 11 straight weeks, as investor confidence gave way to concerns over the credit of such issuers such as Puerto Rico and Chicago and the probability of rising interest rates.

An estimated $9.16 billion in primary issuance is expected for the week of July 20, headlined by a $1.2 billion sales tax revenue offering from the New York State Dormitory Authority.