Buy side

After falling from August 2009 to February 2012, local government employment may finally have turned a corner in the last four months.

The wave of mergers sweeping across the non profit health care sector the past two years is a positive trend for hospitals as well as for investors who like to buy hospital bonds, Fitch Ratings said in a new comment.

A tightening of municipal bond yields in various pockets of the secondary market highlighted an otherwise quiet trading session Monday.

If allegations that banks manipulated Libor prove to be true, those actions likely cost municipal bond issuers with swaps linked to the rate tens of millions of dollars, according to experts.

Primary issuance in the municipal market should return to pre-holiday levels this week following its seasonal holiday volume slide. Industry estimates anticipate $7.07 billion reaching the market.

The law firm taps a former key operative for the Dormitory Authority of the State of New York, perennially a top issuer.

With negligible primary volume, meager activity in the secondary and thinned trading desks, the Fourth of July holiday put the municipal market on ice this week. Muni bond indexes mostly fell, reflecting a slight fall in triple-A yields.

The holiday week slowed the tax-exempt market down to a crawl, but investors still invested in municipal bond mutual funds. Those funds that report their flows weekly saw $317 million of inflows for the week ended July 4.

Municipal issuers back the Municipal Securities Rulemaking Board's proposal to require dealers to discontinue temporarily masking the exact par value of large muni bond trades on EMMA, while dealer and institutional investor groups oppose it.

As many traders and investors take vacations, the municipal market anticipates slight new issuance for the Fourth of July holiday week. The market expects that municipal bonds to be sold this week will total a scant $51.7 million.

Stockton's filing for bankruptcy protection Thursday has already sparked a war of words between the city and one of its largest creditors.

An uninspiring week of frozen yields in the municipal bond market could not put a stop to the inflows pouring into muni bond mutual funds. Muni bond funds saw $625 million of inflows from funds that report their flows weekly for the week ended June 27, compared with net inflows of $555 million the week ended June 20.

Muni bond indexes on the week are down slightly or unchanged. Despite the lackluster week, traders say primary deals have been well-received and yields in the secondary, on moderate activity, have been mixed.

To make more new-issue data available, the MSRB filed a proposed rule change to prohibit dealers from reporting "NRO" unless they also report price and yield information.

In response to a G-17 interpretive notice that takes effect August 2, a SIFMA task force will release a series of documents underwriters can reference as they prepare disclosures to issuers.

A California ballot initiative that would have increased taxes on cigarettes by $1 a pack appears to be finally dead after a tight vote

Tax-exempt funds continued to see negative flows as $1.12 billion fled the funds and total net assets settled at $270.27 billion in the week ended June 25, according to The Money Fund Report, a service of iMoneyNet.com.

As the SEC toys with the possibility of imposing further regulations on money market funds, those close to the $2.6 trillion industry say the revisions are problematic, highly unnecessary, and could seriously undermine the successful operation and existence of the 40-year-old industry.

Refundings have dominated the new supply of municipal bonds so far in 2012. They've been driving up demand by taking higher coupon bonds out of the market