Buy side

Anyone not convinced the municipal market has returned to a state of health need look no further than The Bond Buyer's weekly indexes.

Tax-exempt money market funds saw an end to their short-lived period of inflows as $797.9 million fled the sector and total net assets declined to $303.27 billion in the week ended July 18, according to the Money Fund Report, a service of iMoneyNet.com.

The municipal market this week should see its biggest slate of new issuance so far in 2011, with $8.27 billion expected to come to market.

CHICAGO - Moody's Investors Service this week said it views positively recent court rulings in Colorado and Minnesota dismissing litigation that challenged legislative cuts to retirees' pension cost-of-living increases, and expects the rulings will spur other states to act.

Weekly yield indexes fell precipitously this week thanks to a flight to quality among Treasuries coupled with seasonal demand for tax-exempt paper.

Cash flowed into municipal money market funds for a second week in a row, though noticeably less than the billion dollars the industry recouped in the previous week, according to the Money Fund Report, a service of iMoneyNet.com.

Against a backdrop of investors continuing to pull money from tax-exempt bond funds, the municipal market’s first-ever exchange-traded fund to focus specifically on closed-end muni funds has launched.

Municipal portfolio managers say they are finding value in various pockets of the market, ranging from premium bonds to potentially refundable debt.

CHICAGO - Fears expressed by some municipal market participants that cuts in state aid will spawn a wave of local government defaults are overblown, according to a new report by Nuveen Asset Management that examines 12 Cleveland-area issuers.

The biggest deal expected this week is Wednesday's $760 million taxable and tax-exempt offering from the Dormitory Authority of the State of New York, which will be priced by Wells Fargo. A retail order period on Tuesday will precede institutional pricing.

Muni market strategist Christopher Holmes has departed JPMorgan to join Moody's Investors Service.

The municipal market can expect $1.3 billion of new issuance for this holiday-shortened week, down dramatically from last week’s revised $8.1 billion.

Just as a strong rally in Treasuries helped make munis look good in the first three weeks of June, so too did a major sell-off in the month's final week make tax-exempts appear weak.

In the event that Moody's Investors Service strips the U.S. sovereign credit of its gilt-edged rating, top-rated state and local governments would be more at risk of a downgrade than similarly rated corporate or structured finance products.

On the heels of modest outflows last week, tax-exempt money market funds lost $4.66 billion and settled with $302.07 billion in total net assets for the week ended June 27, according to the Money Fund Report, a service of iMoneyNet.com.

The Navajo Nation is quietly planning to access the capital markets for the first time in its history within the coming six months.

Investors unhappy with low yields but not convinced of the merit in buying lower-graded muni credits to retain cash flow might be more attracted to another simple strategy: buy longer ­paper.

Investors put municipal bond mutual fund flows back in the black this past week. High-yield muni funds continued their strong performance.

The municipal bond market will see $5.6 billion of new issuance this week, with two $1 billion dollar deals topping the charts. Issuance is down from last week's revised $5.8 billion, according to Thomson Reuters.

WASHINGTON - Amid a lackluster housing market, additional downgrades of military base projects and budgetary uncertainty, adjustment was the theme Thursday at The Bond Buyer's sixth annual military housing privatization conference.