Buy side

Fitch Ratings expects municipal defaults to remain isolated events, according to a report the rating agency plans to release today.

Standard & Poor’s knocked almost half the tobacco bond universe down to junk on Thursday as it surmised many of these structures would not be able to withstand a severe cutback in smoking.

Cash-strapped California is poised to dominate the municipal arena this week with two separate offerings that account for 85% of the estimated $14.11 billion in new volume expected in the long-term market, according to Ipreo LLC and The Bond Buyer.

Retail demand for municipal bond mutual funds remained languid last week during one the toughest periods for state and local government debt this year.

Many investors think the expiration of the Build America Bond program would actually be good for existing BABs because the entire universe of taxable bond buyers will be fighting over a finite and relatively small pool of available debt.

Nearly all The Bond Buyer’s weekly yield indexes increased considerably throughout this holiday-shortened week as supply pressure weighed heavily on long-term munis.

Tax-exempt money market funds posted only modest gains this week, increasing by $718.2 million and ending with $327.09 billion in total net assets, but that halted a month-long streak of outflows in the week ending Nov. 8, according to the Money Fund Report, a service of iMoneyNet.com.

J.P. Morgan Asset Management hired two people as part of an effort to expand the firm’s municipal strategies team.

State and local governments generally will be able to take steps to address the economic turbulence they face without filing for bankruptcy or defaulting on their debt, Standard & Poor's said in a pair of reports released Monday.

Cash flows into municipal bond mutual funds last week were at the slowest pace since early in the financial crisis.

Underwriters are bracing for a challenging and busy week as a hefty $10.22 billion of new municipal volume heads to the primary market, according to Ipreo LLC and The Bond Buyer.

Build America Bonds have entered a world of their own. As the market braces for a blitz of taxable state and local government debt sales to close out the year, some experts expect the already-shaky correlations between BABs and other assets to break down.

Both tax-exempt and taxable money market funds lost cash in the weeks ending Nov. 1 and 2. Tax-exempt funds saw noticeably trimmed outflows compared with last week, while the taxable losses are in stark contrast to the previous week's short-lived period of inflows.

Heavy supply trumped easy monetary policy this week as muni yields mostly drifted higher despite the announcement of a second quantitative easing campaign from the Federal Reserve.

Dupree Funds is launching a taxable municipal bond fund this week, just the second effort at creating a mutual fund devoted to Build America Bonds.

Money market funds continue to waive big chunks of their management fees as yields on cash instruments remain too low to charge the full amount.

Build America Bonds will continue to dominate the primary market and volume will continue to seesaw this week as issuers get ready to price nearly $7 billion, down significantly from the nearly $10 billion that arrived last week.

Flows into municipal bond mutual funds remained steady last week in the face of a rough week for bonds.

The Bond Buyer’s weekly yield indexes increased this week, driven by two considerably softer sessions.

Tax-exempt money market funds declined by $1.25 billion to settle at $326.73 billion in total assets the week ending Oct. 25, according to the Money Fund Report, a service of iMoneyNet.com.