Buy side

Municipal bond mutual fund outflows moderated last week as a nervous market seemed better able to absorb the relentless fund selling.

With a $1.1 billion Chicago airport deal postponed, the New York City Transitional Finance Authority and North Carolina instead will offer two of the largest deals in a lackluster week as February starts with an estimated $3.02 billion of volume, according to Ipreo LLC and The Bond Buyer.

To present a more integrated and timely view of states’ total debt obligations, Moody’s Investors Service on Thursday announced that for the first time it will combine net tax-supported debt and unfunded pension-liability figures when evaluating state ratings.

Tax-exempt money market funds experienced a second week of outflows, losing $3.18 billion, and total net assets dropped to $326.73 billion in the week ended Jan. 24 — $1.17 billion less than the previous week, according to the Money Fund Report, a service of iMoneyNet.com.

All The Bond Buyer’s weekly long-term yield indexes declined this week, as the muni market grew firmer in each session.

Investors in tax-exempt debt should be cautious about heeding recent reports about the possibility of widespread bankruptcy and default in the municipal market, and stop running away from solid, safe investments because of distorted opinions in the media.

Investors established a new record for withdrawals from municipal bond mutual funds last week as headline risk continued to chase people from state and local government debt funds.

Volatility and speculation about defaults and bankruptcies in the municipal market continue to spook issuers and investors, affecting volume in the primary market.

The sophisticated investor in retail municipal bonds has ­remained calm the past few months even as mutual funds have dumped state and local ­government debt by the truckload.

Tax-exempt money market funds posted their first decline since mid-December as outflows of $4.35 billion trimmed total net assets to $329.91 billion for the week ended Jan. 17, according to the Money Fund Report, a service of iMoneyNet.com.

Most of The Bond Buyer’s weekly yield indexes increased this week as an earlier sell-off that pushed 30-year yields beyond the 5% threshold outweighed the rally that followed.

Mutual funds have emerged as the dominant source of selling pressure for state and local government paper in the new year as investors keep pulling out their money, forcing fund complexes to sell bonds into an already jittery market.

Volume will be on the light side again this week, with $3.85 billion coming to market at a time of rising interest rates, poor liquidity, and overall market uncertainty, according to Ipreo LLC and The Bond Buyer.

The Bond Buyer’s long-term weekly yield indexes rose this week as media reports about the possibility of a string of municipal bankruptcies weighed on ­investors.

Tax-exempt money market funds took in new cash for the second time in as many weeks in 2011, gaining $2.098 billion to boost total net assets to $334.26 billion for the week ending Jan. 10, according to the Money Fund Report, a service of iMoneyNet.com.

Most municipal bond exchange-traded funds in the fourth quarter performed noticeably worse than the indexes they were designed to track. Or, depending on your perspective, they performed noticeably better.

Investors kept pulling their cash from municipal bond mutual funds at a record pace last week as frightened money continued to flee the market.

The Northeast will be a focal point of activity this week when the New Jersey Economic Development Authority and the New York City Transitional Finance Authority team up to bring the first two meaty deals of the new year to market.

After a wild fourth quarter rife with technical pressures and ­illiquidity, it turns out municipals mostly may have simply been obeying their old master: ­Treasuries.

The Bond Buyer’s weekly yield indexes rose this week in light to moderate secondary trading as activity slowly began to creep back into the market after a holiday lull.