Buy side

This week will be short on days and, yet again, slight of issuance for the municipal bond market. Industry calculations hold that muni bonds expected to be sold this week should total $1.89 billion, versus a revised $2.18 billion million last week.

Long-term municipal bond volume last month easily outstripped that of the same period in a relatively issuance-starved August 2011.

Van Eck Global will soon unveil an addition to its current municipal exchange-traded fund line-up, as the firm has filed with the Securities & Exchange Commission to launch the Market Vectors Short High-Yield Municipal Index ETF.

Memphis-based, fixed-income broker-deal Carty & Co. has expanded its new public finance division into Alabama, with an eye toward other states in the Southeast.

Many market participants may be on vacation, but there's still interest in municipal bond mutual funds. Flows to muni bond funds rose on the week, keeping their hot streak alive.

The municipal market may have been in holiday mode this week, but there has been noticeable activity by institutions in the secondary, traders reported. The week's light issuance in the primary market was well received, as demand remained robust for tax-exempts.

BondDesk Group LLC has appointed former UBS head of municipal trading John Bagley as president and senior managing director of BondDesk Trading.

Tax-exempt money market funds saw the return of significant losses this week -- despite gaining some modest inflows last week -- as $2.45 billion fled the funds and total net assets settled at $270.01 billion in the week ended Aug. 27, according to The Money Fund Report, a service of iMoneyNet.com.

Credit spreads on Puerto Rico's general obligation bonds have widened by as much as 70 basis points from the beginning of the year, while similarly rated bonds have seen spreads narrowing.

Demand for municipal bonds remains robust heading into the Labor Day holiday weekend even if expected issuance does not. Industry estimates hold that municipal bonds to be sold next week should total a paltry $1.55 billion, versus a revised $6.38 billion last week.

Tax-exempt money market funds grew by $124.80 million — a slight improvement from the prior week — as total net assets settled at $272.46 billion in the week ended Aug. 20, according to The Money Fund Report.

BondUnderwriter wants retail municipal bond investors to have a more efficient way to learn about upcoming negotiated market deals from their issuers, so it designed its new centralized Web portal to consolidate publicly available information.

Encouraged by the recent market weakness, many retail investors are eagerly delving into the municipal market for new bonds or to reinvest any remaining rollover proceeds.

Municipal bond investors have varying reactions to the precipitous rise in yields over the past several weeks. On a relative basis, bond holders may rejoice in the fact that munis have outperformed Treasuries over the period.

A Florida law allowing local governments to declare a "financial urgency" can be an effective strategy for budget relief, says Fitch. Miami has used it several times.

Despite several turbulent years and the gloomy outlook for single-family housing bonds, municipal bond housing experts are optimistic about the future of housing finance agencies.

The municipal market should see an uptick in primary volume this week, led by a Texas auction of $9.8 billion Rans, meet a still-robust level of demand. Potential volume should total $6.79 billion, up from total sales of $4.77 billion last week.

Moody's Investors Service is considering across-the-board and targeted downgrades in California in the aftermath of the state's recent municipal bankruptcies.

Hedge fund Bridgewater Associates, with support from the state, will construct a new headquarters in Stamford, Connecticut Gov. Dannel Malloy announced.

After the arrival of last week's bounty, outflows of $1.61 billion left tax-exempt money market funds with $272.34 billion in total net assets for the week ended Aug. 13, according to the Money Fund Report, a service of iMoneyNet.com.