Buy side

Tax-exempt money market funds started the New Year on a positive note, amassing $3.66 billion in new cash to end the week ending Jan. 3 with $332.16 billion.

No sooner did Build America Bonds become orphaned than they caught fire.

Municipalities will continue their hiatus from borrowing money this week as they are once again slated to sell a meager amount of new debt.

Municipal bond mutual funds coughed up more cash last week as investors continue to take their money out of state and local government debt funds at a record pace.

Tax-free money market funds commanded new money from investors last week — the second straight week of inflows — possibly marking an ebb, or at least a slowdown, to the rush of cash away from money funds the past two years.

Holiday doldrums coupled with a Sunday blizzard that buried much of the Northeast conspired to keep the secondary market very quiet.

MFS Investment Management's Municipal High Income Fund is a gem of consistency. In late December 2010, it was sporting a 4.57% year-to-date return — good enough to lead the average performance of its peers by three-quarters of a percentage point.

Record municipal bond mutual fund redemptions have emerged as a threat to the rally most market participants expected to kick off early next year, as the anticipated slowdown in the supply of new bonds is met with a wave of selling by mutual funds.

The municipal bond market will be asked to digest a single small deal this week as a welcome lull in new supply continues through the holidays.

All The Bond Buyer’s long-term weekly yield indexes declined this week in the wake of Friday’s rally, during three lightly traded sessions in advance of the upcoming Christmas closure.

The tax-free money market fund industry continues to shrink rapidly, squeezing what had been a major source of short-term credit for municipalities and arguably leading to higher borrowing costs for state and local governments.

Municipal credit analysts are spending more time evaluating a risk few used to give much thought to: a municipality's loss of market access for refinancing short-term debt.

Investors continued to ferry cash out of their municipal bond mutual funds at historic rates last week as a tumultuous sell-off sowed fear among buyers.

The flood of new supply that has inundated the municipal bond market the past month will die out this week as issuers take a breather from selling new debt.

The Bond Buyer’s weekly yield indexes increased this week, due largely to substantial weakness on Monday and Tuesday.

Tax-exempt money market funds lost a sizable $2.09 billion, dropping total net assets to $326.88 billion for the week ending Dec. 13 and erasing nearly all gains from the previous week, according to the Money Fund Report, a service of iMoneyNet.com.

The municipal market has become so turbulent and illiquid that even investors who find tax-exempt yields appealing are sitting on their hands. The recent rout in tax-exempt bonds has some portfolio managers, investors, and dealers beginning to sniff at yield levels that could invite buyers back into the market.

A change in the methodology the Federal Reserve uses to measure who owns municipal bonds has masked the growth in foreign ownership of state and local government debt.

Municipal bond mutual funds are hemorrhaging cash at historic rates due to a fearful investor reaction to the public drubbing of state and local government debt.

More than $10 billion of new volume is expected to arrive in the municipal market this week on the heels of the price stability that followed some volatility last week.