Buy side

Investors in municipal bonds are mostly pleased that hedge funds have increased their bets recently in distressed state and local government debt.

American Airlines and US Airways Group Inc. settled an antitrust lawsuit with the U.S. Department of Justice, clearing American's path to exit bankruptcy and repay its municipal bondholders.

Volume will slow this week due to the observance of Veteran's Day as deals from California and New Jersey head to a market that weakened after Friday's stronger-than-expected employment report.

Municipal bond mutual fund flows remained solidly in the red for a 24th straight week, with outflows of $738 million.

Municipal managers and strategists, still reeling from Detroit's bankruptcy, the surge in Puerto Rico yields, and a mid-year sell-off that was the worst in a quarter century, are getting their portfolios ready for the next expected hurdle as 2014 approaches — another spike in interest rates.

Tax-exempt money market funds gained the first inflows in four weeks as $1.80 billion arrived in the week ended Nov. 4 and total net assets settled at $264.58 billion, according to The Money Fund Report, a service of iMoneyNet.com.

Joseph J. Roberts, a director of institutional sales at M&T Securities Inc., has decided to step down at the end of 2013 following a 48-year career in the financial markets, mostly in the municipal bond industry.

Brownstone Investment Group, a fixed income investment firm, brought aboard former Morgan Stanley trader Matthew Martines as managing director to expand its municipal bond trading and electronic market-making units.

Tradeweb Markets completed the purchase of BondDesk and rolled out its rebranded retail group, called Tradeweb Direct.

Long-term municipal bond volume for October trailed 2012 issuance for the third straight month, much as it has throughout the year, falling 28% over the same period in 2012.

Outflows among tax-exempt money market funds continued for a third consecutive week as $879.7 million exited the funds and total net assets fell to $262.78 billion.

Non-profit hospitals in states that have opted not to expand their Medicaid programs under the new federal health care law will face financial problems and rating pressure next year, Fitch Ratings warned.

The network of muni credit professionals in Philadelphia has spawned a local analyst group that will launch next month with a Logan Square reception.

The steady rise of inter-dealer trading of municipal bonds since the financial crisis has spurred debate in the market. Does their trading produce more liquidity or less-reliable price levels?

Drexel Hamilton LLC, a veteran-owned full service institutional broker dealer, added to its municipal infantry with the appointment of John M. Donovan as senior vice president of municipal institutional sales.

While Connecticut’s $600 million special tax obligation financing will top this week’s slate of primary market deals, an overall drop in supply may leave investors starved for paper after a rally last week that dropped municipal yields to three-month lows.

Oppenheimer Funds, manager of 12 of the top 14 funds in exposure to Puerto Rico, has suffered the biggest outflows in the industry over the past six weeks as investors continued to shy away from the commonwealth’s debt after yields surged.

Investors continued to pull money from municipal bond mutual funds for a 22nd straight week, at $746 million.

Tax-exempt money market funds continued their downward trend as $1.26 billion exited the industry and total net assets settled at $263.66 billion in the week ended Oct. 21, according to The Money Fund Report, a service of iMoneyNet.com.

Banks extended their record holdings of municipal bond debt in the first half of 2013 to the highest level since 1991 as they cashed in on an unprecedented opportunity for higher yields amid volatility, municipal sources said.