Buy side

The municipal market started Wednesday morning slightly weaker in tone as dealers worked to unload some of their balances.

Just because the household sector saw a material decline in its holdings at year end, it didn't mean the retail crowd snubbed its nose at municipal securities altogether — it just shifted its access to the debt.

Six weeks after pulling its last bond sale, Illinois plans a full court press with investors and will drop a bidding feature that had dampened the interest of some broker-dealers as it prepares to competitively sell $800 million of debt.

The Chicago City Council will take up ordinances as soon as Wednesday authorizing up to $1.65 billion of O'Hare International Airport debt that will raise new money for the airport's $8 billion expansion.

Fewer governors have been focusing on pension reform in their state of the state addresses this year, but most who propose reform follow through, according to Loop Capital Markets.

Many prominent, heavily leveraged municipal bond closed-end funds saw sharp declines to their NAVs late last week thanks to seasonal factors, such as lighter cash flows, heavier supply and lower demand, mixed in with the approaching tax season.

To no surprise in the bond markets, teetering Harrisburg, Pa., will miss $5.2 million worth of payments on general obligation bonds and notes due March 15.

U.S. banks enjoyed more exposure to municipal bonds at the end of 2012 fueled by increased profitability and revenues looking for a home in the face of declining commercial loan generation and the imposition of new federal regulations, according to municipal experts.

A $2.5 billion California general obligation financing will thunder into the municipal market at a time when volume is expected to inch up over $8 billion in what is one of the largest one-week supply scenarios so far this year -- however the extra supply may force underwriters to bump yields in order to get investors' attention on the heels of last Thursday and Friday's weakness, according to one market expert.

Barclays is warning that if a Build America Bond subsidy payment is reduced under sequestration and this triggers an extraordinary redemption provision, the issuer may be able to call those BABs anytime, even years later when market changes make the call affordable.

Zero-coupon bonds: exceptional value or chronic underperformance? Opinions vary, but there's no mistaking that there's a lot of activity in zeros lately as investors look to them for yield.

The Bond Buyer's weekly yield indexes increased the week ended March 7.

For the first time in nine weeks, muni bond funds that report flows weekly recorded outflows for the week of March 6, at $97 million.

Flows into tax-exempt money market funds were positive by $17 million in the week ended March 4 as total net assets only increased to $278.79 billion, according to The Money Fund Report, a service of iMoneyNet.com.

The taxable municipal bond market is attracting buyers as the tax-exempt municipal bond market and other taxable asset classes look expensive.

The New York Supreme Court dismissed the lawsuit brought by various financial institutions against MBIA Inc. over its 2009 split into two companies.

A nearly $700 million Maryland general obligation sale will headline the primary market this week -- despite facing potential spending constraints -- and will be among several other Northeast issuers that will dominate the new-issue calendar following strong activity last Friday.

Standard & Poor's downgraded bond insurer National Public Finance Guarantee three notches to BB from BBB Thursday evening.

Michigan Gov. Rick Snyder's historic decision Friday to take over the city of Detroit bodes well for the credit and for other local distressed governments, muni experts said, even as Snyder warned that all creditors might take have to take a loss.

The tax-exempt market ended February on a high note with a rally across the curve.