Buy side

After amassing $555 million of inflows for the week ended June 20, muni bond mutual funds that report their flows weekly have now seen inflows for 10 consecutive weeks.

Morningstar, Inc. will soon enter the municipal bond research business. It plans to offer credit quality and price discovery products and services on the municipal market to registered reps, asset managers, banks and insurance firms likely over the next three months.

A 39% plunge in the median net worth of U.S. families is a credit negative for state and local governments and higher education, Moody's Investors Service stated.

Additional regulation of money-market mutual funds could increase short-term borrowing costs for state and local governments, leading municipalities to raise taxes or cut spending on infrastructure and other critical projects, according to a paper released Monday by a Georgetown University professor.

The municipal bond market expects another reasonably healthy week of new issuance. The Massachusetts Building Authority leads the charge with an expected pricing of $750 million of sales tax refunding bonds.

Jim Swanson, chief investment strategist at MFS Investment Management, shared his views on the muni market in 2012's second half, legislative issues affecting the market, overall volume and his prognosis on mutual fund flows and performance.

Municipal bond mutual funds continued their hot streak. As the market saw modest firming on the week, muni bond funds saw inflows for a ninth consecutive week.

The municipal bond market emerged from a week of heavy issuance somewhat stronger past the front end of the yield curve.

Tax-exempt money market funds gave up the inflows they accumulated last week — and then some — when they lost $1.45 billion and total net assets dropped to $272.20 billion in the week ended June 11, according to the Money Fund Report, a service of iMoneyNet.com.

Despite Treasury outperformance and cheap ratios to municipal bonds, crossover buyers are keeping their distance from the tax-exempt market.

Executives from Fitch Ratings responded to issuer concerns, saying their agency does not require municipal bond issuers to sign indemnity agreements releasing Fitch from liabilities resulting from ratings.

Fitch Ratings has downgraded more than a dozen tender-option bond issues and variable-rate demand obligations.

Municipal bond exchange-traded funds have enjoyed rapid growth since their introduction in September 2007.

The hunt is on for yield in the municipal market as interest rates continue to hover around historical lows, forcing investors to use varying strategies to boost returns.

Municipal bond issuers have assembled a whale of a calendar for this week, with just over $12 billion slated to come to market, nearly double last week’s $6.35 billion total.

Municipal bond yields in the short and intermediate parts of the curve rose sharply this week.

The tax-exempt market may have experienced a sizable backup in yields on the week, but muni bond mutual funds still saw robust inflows.

June arrived on a positive note for tax-exempt money market funds, which accumulated $1.19 billion in new cash while total net assets rose to $273.64 billion in the week ended June 4, according to the Money Fund Report, a service of iMoneyNet.com.

A decline in the number of U.S. bank and thrift consolidations in 2012 is a credit positive for municipal bonds, Moody's Investors Service said.

Analysts and portfolio managers say there is opportunity in paper from Puerto Rico and California, two places struggling with challenges that range from closing budget gaps and controlling spending to legislative hurdles and pension issues.