Buy side

Wary investors in the path of Hurricane Sandy contributed to the $1.10 billion of cash that flowed out of tax-exempt money market funds in the week ended Oct. 29.

Moody's Investors Service, Standard & Poor's and Fitch Ratings directors say Hurricane Sandy could create a downward impact on a few of the most severely impacted credits.

Hurricane Sandy’s floodwaters immobilized much of the municipal market, but not the buyside. With bond issuance almost halted, investors are even more cautious and hesitant than they have been of late.

Because of Hurricane Sandy, Maui County, Hawaii, postponed the competitive sale of $70.1 million in general obligation bonds to Thursday at 1 p.m.

Hurricane Sandy left major challenges for many municipal bond firms after the Financial District of Manhattan was hammered hard by the storm.

Kansas Gov. Sam Brownback last week endorsed legislation that would require local governments to lower their property tax rates automatically when assessed valuations increase.

The scheduled approach of Hurricane Sandy has cast a shadow over the municipal bond calendar for the week. At press time, many municipal bond issuers scheduled to price deals on Tuesday said they would go through with Tuesday's scheduled deals.

The Securities Industry and Financial Markets Association said Sunday afternoon it expected U.S. bond markets to be open Monday.

A proposed merger between two large nonprofit healthcare systems is a credit positive for the nonprofit healthcare sector, Moody's Investors Service says.

An association representing safety-net hospitals is lobbying Congress to restore cuts that are built into the new federal health care law.

Industrial development revenue bonds have shown the best total return of all municipal bond sectors so far this year.

In the third quarter 79% of Moody's Investors Service's ratings actions were downgrades.

Investors poured $666 million into weekly reporting municipal bond mutual funds this past week, marking a 28th straight week of inflows.

Neither primary volume nor moderately volatile Treasuries did much to upset the municipal market's steady mien this week. Despite the modest backup in most rates among munis and Treasuries on the week, muni bond indexes held their levels.

Tax-exempt money market funds continued to lose cash for a second week in a row as total net assets decreased by $679 million to $266.74 billion in the week ended Oct. 22, according to The Money Fund Report, a service of iMoneyNet.com.

Moody's said the ongoing wave of mergers sweeping the non-profit health care sector led to an uptick in upgrades during the third quarter and could reverse earlier expectations that downgrades would outpace upgrades for the full year.

The municipal market can expect another middling week of new issuance. Estimates hold that anticipated volume for the week should reach $7.64 billion.

Standard & Poor's downgraded local and state governments more than it upgraded them in the third quarter 2012, but did the opposite with public utilities.

Municipal bond mutual funds saw inflows for the 27th consecutive week. Funds that report their flows weekly recorded inflows of $621 million for the week ended Oct. 17.

As a veteran with 26 years of experience in munis, Guggenheim Partners' Jim Pass talks about investment strategy, political risk, and what he's seeing in the market.