Buy side

The “magic” 5% tax-free yield is ­sustaining strong demand from retail investors.

These days there seems to be a lot of information available to nervous retail investors about the municipal bond market. Maybe even too much.

CHICAGO — Last year’s dire predictions that a coming record wave of expiring bank credit facilities would tax the municipal market did not come to fruition in the first quarter, according to a new report from Moody’s Investors Service.

New issuance remains sparse with a light calendar this week on the heels of last week’s slim pickings.

In a quick shift, net outflows from tax-exempt money market funds fell to $302.8 million for the week ended May 2, according to the Money Fund Report, a service of iMoneyNet.com.

After the billion-dollar Chicago financing for O’Hare International Airport temporary boosted supply and lured retail investors to its 6% yields last week, volume will again recede to its previously skimpy state with few sizable deals vying for investors’ attention this week.

In what marks the largest outflow activity so far this year, tax-exempt money market funds lost a hefty $5.17 billion and total net assets fell to $306.93 billion for the week ended April 25, according to the Money Fund Report, a service of iMoneyNet.com.

Tax-exempt municipal money market funds double-downed on outflows as a whopping $4.70 billion poured out in the week ended April 18 and total net assets fell to $312.10 billion, according to the Money Fund Report, a service of iMoneyNet.com.

Chicago's $1 billion sale of third-lien revenue bonds for O'Hare International Airport will be the centerpiece of an otherwise relatively light post-holiday market this week.

In one of the skimpiest new-issue weeks so far this year, the municipal market will see only an estimated $1.43 billion of new bonds, according to Ipreo LLC and The Bond Buyer.

Tax-free municipal money market fund assets declined by $2.25 billion to $316.80 billion in the week ending April 11, representing a major acceleration of outflows from the previous week, according to the Money Fund Report, a service of iMoneyNet.com.

March was the third month in a row that retail investors were net buyers of individual municipal bonds, and it also was the fifth consecutive month that mom-and-pop investors sold more shares of muni mutual funds than they purchased, according to the March Transparency Report published by BondDesk Group LLC.

In the face of ongoing muni weakness and the approaching federal income tax deadline, municipal bond mutual funds that report their flows weekly saw losses rise significantly as $1.14 billion left the $462.10 billion industry in the week ended April 6, according to ­Lipper FMI.

The municipal market will get a boost of fresh supply this week as issuers from Texas, New York, and Louisiana prepare to price some of the largest deals to surface in weeks with volume estimated to be $4.34 billion, according to Ipreo LLC and The Bond Buyer.

Tax-exempt money market funds saw only moderate outflows as investors yanked a mere $252.5 million in the week ended April 4, causing total net assets to dip slightly to $319.05 billion, according to the Money Fund Report, a service of iMoneyNet.com.

A $1 billion financing for the North Texas Tollway Authority, a $500 million offering from the New York Transitional Finance Authority and a pair of Colorado deals will lead the still-paltry new-issue activity in the municipal bond market.

Tax-exempt municipal money market funds lost nearly $3 billion in the week ended March 28 as total net assets fell to $319.30 billion, according to the Money Fund Report, a service of iMoneyNet.com.

The downturn in property tax receipts for municipal governments may finally have begun.

Despite volatility in the municipal market, sales of individual tax-free bonds to retail investors have been brisk even as cash withdrawals from muni mutual funds are still high, experts say.

Households surpassed their previous record and hit a 20-year high as they hoarded $1.095 trillion of the nearly $3 trillion of outstanding municipal bond debt issued by states and local governments as of 2010, according to data recently released by the Federal Reserve.