Buy side

Investment management firm Spring Mountain Capital is starting a high-yield and distressed municipal strategies group to invest in sub-investment-grade municipal bonds.

The municipal market should expect a welcome, though moderate, uptick in new issuance this week.

Tax-exempt money market funds saw outflows of $2.72 billion as total net assets decreased to $284.58 billion in the week ended March 26, according to the Money Fund Report, a service of iMoneyNet.com.

By most standards, the tax-exempt market has had a respectable week.

Many banks were aggressive buyers of municipal bonds in 2011, seeing value in high relative tax-exempt yields and stepping in to make direct purchases of debt.

The municipal market's primary calendar is braced for a week of low volume.

The municipal market has steadied somewhat after muni yields mostly battled those of Treasuries to a draw over the week.

Tax-exempt money market funds saw lighter outflows compared to last week, but still lost $684.3 million and saw total net assets decline to $287.30 billion in the week ended March 19, according to the Money Fund Report, a service of iMoneyNet.com.

When Moody's Investors Service put the short-term credit rating of Bank of America under review for a downgrade back in February, that stirred up the water for tax-exempt money market funds.

Municipal bond investors have long known that annual appropriation-type debt, such as certificates of participation, are inferior debt structures. Those investors who bought them had faith at the time in the issuer's responsibility to stand behind the debt.

Investors in the municipal market are starting to come to terms with higher yields for primary volume.

In a week that very well may have marked the end to five months of rallying for municipal bond yields, muni bond mutual funds still saw strong inflows.

Spring is definitely in the air on Wall Street, with a particularly sunny view toward equities. But for munis and Treasuries, with yields rising rapidly in the wake of a robust risk-on trade, the outlook has been much gloomier.

Unable to shed a downward trend that first began early last year, ownership of municipal bonds by households fell to the lowest level in two years as it continued to decline in the fourth quarter of 2011, according to quarterly data recently released by the Federal Reserve Board.

The municipal market needed this. That's the response some in the market had regarding last week's surge in new issuance and subsequent backup in yields.

The municipal market may be struggling to absorb the uptick in new supply, but muni bond mutual funds still saw their heaviest inflows since 2009.

The municipal market saw a surge in new-issue supply this week and weakening Treasuries that drove high-grades cheaper and gave tax-exempts a heavier tone.

Tax-exempt money market funds increased by $1.10 billion and saw their total net assets rise to $289.85 billion for the week ended March 5, according to the Money Fund Report, a service of iMoneyNet.com.

CHICAGO — The "national explosion of consolidation" across the health care sector differs in key ways from past trends, as providers face new, complex problems and new players have entered the game to craft merger models that include risks and benefits, Moody's Investors Service said in a report released Thursday.

WASHINGTON — The number of municipal securities that traded in 2011 remained largely unchanged from 2010 and the volume of trades of less than $100,000 rose during the period, suggesting that more retail investors may be buying and selling municipal bonds.