Buy side

Yield and spread opportunities in the tax-exempt market in the first half of 2011 led banks to invest a larger portion of their assets in municipal securities compared to the same period last year, according to industry analysts and quarterly data provided by Highline Financial LLC.

Muni investors have herded into short-term debt the last few months thinking that if rates rise, longer-term bonds will plummet in value and it will be good to have cash on hand to reinvest at higher rates. But are short-term bonds really such a safe haven?

Plunging interest rates are luring more issuers to market, encouraging market participants to believe muni volume for the final months of 2011 can increase from recent anemic levels.

Eye-popping declines in muni yields on Thursday might finally prod investors into accepting low yields and prompt issuers to take advantage of some of the lowest borrowing costs in history.

Low new-issue volume and active early redemption of debt contributed to a decline in the amount of outstanding municipal debt in the second quarter to $2.89 trillion.

The summer doldrums are officially over, as issuance in the municipal market is expected to surge this week.

For the second straight week, and after six consecutive weeks of outflows, municipal bond mutual funds actually stayed positive.

The stability of the muni market was on display again this week, even as the risk of increased supply took hold of investor sentiment.

CHICAGO - Chicago will hold its first-ever investor conference next month as new Mayor Rahm Emanuel and his chief financial officer, Lois Scott, seek to bolster the city's strained fiscal image with the buyers of its debt.

Tax-exempt money market funds lost nearly half of what they gained last week, as investors yanked $2.63 billion in the week ended Sept. 12 and total net assets fell to $294.33 billion, according to the Money Fund Report, a service of iMoneyNet.com.

With Labor Day behind it, the municipal market will see a big surge in new deals this week, with estimated issuance rising to $4.65 billion, close to the weekly average this year.

Munis exercised a run-of-the-mill pattern this week as tax-exempts followed the broader rally in Treasuries at a lag.

Tax-free money market funds are back in positive territory this week after regaining nearly all of what they lost last week.

Municipal bond yields are at or near all-time lows, but it's no thanks to muni mutual funds.

Despite a Labor Day holiday-shortened week, the municipal market could see new issuance almost double from last week.

Outflows continued among tax-exempt money market funds this week as investors withdrew $1.72 billion and total net assets declined to $295.25 billion in the week ended Aug. 29, according to the Money Fund Report, a service of iMoneyNet.com.

Municipal investors were on the sidelines this week, perplexed and uncertain about what their next move should be.

Every bond has its season. In the current environment of ultra-low rates and a steep municipal yield curve, the sun is shining on premium bonds.

Kicker bonds offer unique benefits depending on whether you are a short-term or a long-term buyer. But each strategy carries its own risks.

CHICAGO — After a slow 2010, capital spending by nonprofit health care borrowers will likely remain low through 2015 amid a still-weak economy and the uncertain impact of the new federal health care law, according to Fitch Ratings.