Buy side

S&P raised its GO rating for Amherst, Mass., home of the University of Massachusetts, to AA-plus from AA, citing the town's strong budgetary performance.

After almost a decade of shrinking business and muddied prospects, the bond insurance industry ended 2013 having tackled at least one major milestone: get penetration back on the upswing.

State and local government revenue growth and expectations for higher interest rates last year were the main contributors to a 12.1% decrease in note issuance, municipal managers and analysts said.

Housing and development were growth sectors in the 2013 bond market as others fell sharply in the second half of the year.

New issue supply in the municipal market was down during 2013, largely driven by a major slowdown in refunding deals during the second half of the year.

The municipal market will see a small boost in issuance next week even as total volume remains low.

Puerto Rico bond yields rallied Wednesday and Thursday, in a sign of hope for a successful bond sale next month.

The weekly average yield to maturity of the Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, was down one basis point this week, at 4.88% for the week ending Feb. 6.

Municipal mutual funds gained $320.03 million of new cash in the week ended Feb. 19, Lipper FMI reported.

Tax-exempt money market funds posted $2.08 billion of outflows, reducing total net assets to $268.04 billion in the week ended Feb. 17, according to The Money Fund Report, a service of iMoneyNet.com.

ETFs and mutual funds are well-positioned for rising interest rates because they have most of their fixed income holdings in short-term government bonds, according to Morningstar Inc.

The California Housing Finance Agency showed it's possible to buy time, and not just kick the can down the road, when faced with significant financial challenges, according to a Municipal Market Advisors report.

The rise in high-deductible health plans could bring more pressure to bear on an already pressured non-profit health care sector, Fitch Ratings said.

Supply will trail off again as a $400 million Metropolitan Transportation Authority is expected to sell amid an otherwise lackluster holiday-shortened week.

Municipal mutual funds reported $82.1 million of net inflows in the week ended Feb. 12, bouncing back from a $227.3 million outflow the week before, Lipper FMI said Thursday.

Bond Buyer indexes finished the second week of February largely unchanged.

Mayor Bill de Blasio's preliminary $73.7 billion budget proposal for New York City still leaves more questions than answers, some capital markets observers said.

Tax-exempt money market funds added $1.25 billion of new cash to boost total net assets to $270.12 billion in the week ended Feb. 10, according to The Money Fund Report, a service of iMoneyNet.com.

The Financial Industry Regulatory Authority has received dozens of filings for arbitration investors who say they were harmed by unsuitable advice doled out by UBS Financial Services of Puerto Rico when the market for the commonwealth's bonds declined.

Sizeable deals planned in New York, Louisiana, and Texas won't do much to relieve a drought in supply this week as volume is expected to fall below $3 billion on the heels of last week's oversubscribed Illinois deal and a second Puerto Rico downgrade.