Buy side

Municipal bonds saw a largely mixed week of trading in a tight range. Subsequently, so did muni bond indexes, which ranged from unchanged to up no more than five basis points on the week.

Tax-exempt money market funds recaptured nearly all of last week's losses, generating inflows of $2.36 billion to settle at $286.77 billion in total net assets in the week ended Nov. 7, according to the Money Fund Report, a service of iMoneyNet.com.

Retail reaction to the announcement late Wednesday that Jefferson County, Ala., filed the largest municipal bankruptcy in U.S. history is likely to be muted, yet will still be closely monitored, portfolio managers say.

Standard & Poor's warned that retiree health care benefits are a growing burden for public universities.

The municipal market new-issuance machine should churn out slightly less volume for the primary this week. But it's still operating at a relatively high capacity, as far as 2011 has gone.

Investors are still confident about tax-exempts, but less so than in previous weeks. Still, municipal bond mutual funds saw a fourth straight week of inflows, and a eighth week out of nine.

Volatility in the municipal and Treasury markets has investors flummoxed at a time when an expected calendar-year record amount of issuance has flooded the primary. The Bond Buyer's weekly yield indexes all fell, though not as far as those of Treasuries.

Investors withdrew $2.38 billion of cash from tax-exempt money market funds in the week ended Oct. 31 in what marked the third consecutive week of significant outflows, according to the Money Fund Report, a service of iMoneyNet.com.

WASHINGTON - Secondary market trading volume surged to more than $851 billion in the third quarter of 2011, the highest so far this year, but still fell 8.5% short of the almost $931 billion reached during the same period last year, the Municipal Securities Rulemaking Board said Wednesday.

Moody's Investors Service calls it "the great credit shift." RBC Capital Markets calls it the new paradigm. Meredith Whitney calls it ... well, let's move on. The point is: the municipal bond market has transformed dramatically the last few years, opening doors for some and shutting doors for others.

Low interest rates have significantly colored the outlook industry veterans have for the municipal market.

Analysts and managers say they are finding value in the municipal market by taking advantage of attractive intermediate yields and buying opportunities presented by credits that find themselves in the headlines, among other strategies.

November is starting off with a relatively strong week of new issuance in the municipal market, with two deals totaling at least $1 billion each. The amount of new deals continues to climb after a strong October.

Investor confidence in tax exempts continued this past week as municipal bond mutual funds saw a third straight week of inflows, and a seventh week out of eight.

Tax-exempt money market funds continued their losing streak again this week as they posted $1.31 billion of withdrawals — a little more than half of last week’s outflows — and total net assets dropped to $286.7 billion in the week ended Oct. 24, according to the Money Fund Report, a service of iMoneyNet.com.

The Bond Buyer's weekly yield indexes outperformed Treasuries during a week that saw middling investor interest in the primary market and a dramatic sell-off in Treasuries during the latter half of the week.

A credit rating agency wants borrowers to shine more light on a practice they've been using increasingly to issue debt.

After several weeks of relatively high volume, municipal issuance isn't cooling off just yet, with $7.37 billion expected to come to market, down only slightly from last week's revised $7.71 billion.

Municipal bond mutual funds saw a second straight week of inflows, and a sixth week out of seven.

Coming off three weeks of price losses, municipal bonds staged a decent rally this week despite a jump in supply and weakness in Treasuries.