Buy side

Though New Jersey and California are on starkly different credit paths, municipal analysts said their recent trading patterns suggest equally-strong demand.

The Puerto Rico Electric Power Authority announced agreements with insurers and bondholders controlling more than 60% of PREPA's outstanding bonds to amend existing bond documents to provide PREPA with liquidity and for PREPA to appoint a chief restructuring officer.

The Bond Buyer's muni bond indexes strengthened in the week ending Aug. 14.

Despite strong investment gains and other improvements, a persistent underlying weakness remained the underlying theme for the non profit health care sector in 2013, according to Standard & Poor's.

Zero coupon tobacco bonds may fall especially hard when interest rates begin to rise, according to analysts who follow the high yield, long maturity securities.

Hospitals in the 24 states that have opted against expanding Medicaid under federal healthcare reform stand to lose out on $168 billion over 10 years while states will lose out on more than $400 billion, a new report from the Urban Institute concludes.

With higher education issuance set to jump, analysts are pondering whether the higher yields on the credits are worth the risk.

Large deals in New York and New Jersey -- led by New York City's $900 million general obligation bond refunding -- are expected to spark high demand this week due to their specialty state status despite an otherwise lackluster primary market dulled by the seasonal summer pullback in issuance.

Municipal bonds on the intermediate part of the curve outperformed long term maturities, producing a positive return with less volatility in the past 18 months, according to Granite Springs Asset Management.

The Bond Buyer's muni bond indexes were narrowly mixed in the week ending Aug. 7.

T. Rowe Price recently launched an Intermediate Tax-Free High-Yield Fund targeting investors who are worried about protecting their principle in the face of potentially higher interest rates yet comfortable with some extra risk.

Rhode Island's Tobacco deal has been put on day to day status by Citigroup following a lawsuit from two Oppenheimer Rochester funds.

Shortening duration, buying premium bonds, and minimizing risk are three paths municipal managers are taking as the second half of 2014 gets under way in anticipation of higher interest rates.

Volume will inch up slightly from last week but remain relatively sparse as an estimated $5.81 billion makes its way to market, led by a $575 million Illinois Finance Authority revenue sale and a Rhode Island Tobacco Settlement Financing Corp. offering.

Inflows for all municipal bond funds fell off slightly this week from last week, but still remain fairly strong.

The Bond Buyer's muni bond indexes were mixed in the week ending July 31.

If the Puerto Rico Electric Power Authority were to fail to make loan payments to Citibank due on July 31, the consequences might spread beyond Puerto Rico bonds. Bad news on PREPA could also trigger a selloff of tobacco bonds, analysts speculated.

Analysts are conflicted over how investors should protect their 2014 returns and mitigate their interest rate risk for the rest of the year.

New-issue volume is expected to decline by around $2 billion this week, as a handful of deals from California, the District of Columbia and Illinois will vie for investors’ attention.

Municipal funds reported their highest inflows in 11 weeks.