Buy side

Tax-exempt money market funds lost about half of what they gained last week, dropping $283.8 million to $356.98 billion in total assets for the week ending May 17, according to the Money Fund Report, a service of iMoneyNet.com.

Issuers from the Northeast will take the spotlight as the New York City Transitional Finance Authority and Pennsylvania each plan to sell at least $1 billion this week in the heaviest calendar of municipal bond deals in more than a month.

Municipal bond mutual funds continued to garner cash last week despite the flight from risk that has driven most of the flows this month.

The Securities and Exchange Commission has accused the former manager of two Schroders Investment Management municipal bond mutual funds of tipping his family members about impending distress to the funds and urging them to sell their shares.

State Street Global Advisors and Nuveen Investments launched an exchange-traded fund tracking Build America Bonds yesterday as investment vehicles devoted to taxable municipal debt continue to proliferate.

Tax-exempt money market funds had inflows of $545.7 million and settled with $357.2 billion in total assets for the week ending May 10, while the average seven-day simple yield dropped one basis point to 0.03%, according to the Money Fund Report, a service of iMoneyNet.com.

Some municipal bonds have rallied significantly since Moody’s Investors Service and Fitch Ratings last month overhauled their systems for assigning ratings to state and local government credits — effectively upgrading almost the entire universe of muni bonds.

The Bond Buyer’s weekly yield indexes increased slightly this week amid muted interest in the secondary market.

Retail investors shrugged off the panic plaguing most of the world’s financial markets last week and poured more cash into municipal bond mutual funds.

The primary market is expected to include a handful of large deals that run the gamut from long-term, fixed-rate, tax-exempt offerings in various sectors to short-term, floating-rate, and taxable issues that are part of an estimated $7.56 billion of new volume anticipated for pricing this week, according to Ipreo LLC and The Bond Buyer.

One would expect that a socially conscious municipal bond mutual fund devoted to investing in projects that create jobs would consider Build America Bonds a welcome addition to the market.

While not the most scientific measure of foreign interest in municipal debt since the advent of Build America Bonds, Sylvan Feldstein, in his keynote address Wednesday at the National Federation of Municipal Analysts annual conference in Santa Ana Pueblo, N.M., noted more foreigners buying copies of the Handbook of Municipal Bonds.

Among the many changes to the municipal bond market wrought by the financial crisis, one may be the factors that drive muni mutual fund returns.

Long-term municipal bond yields fell across the board this week, according to the Bond Buyer’s weekly yield indexes. The strengthening did not keep pace with Treasury yields, however, which fell much more sharply.

Outflows from tax-exempt money market funds for the week ending May 3 were $1.92 billion, nearly half of last week’s amount, leaving assets at $356.73 billion, according to the Money Fund Report, a service of iMoneyNet.com.

SANTA ANA PUEBLO, N.M. — The short-term fiscal outlook for states is bleak. The long-term outlook is even bleaker.

It is not often one hears someone nicknamed “Wild” Bill exhorting patience.

Fitch Ratings completed its recalibration of municipal bond ratings on Friday, raising their marks on more than 2,200 credits, according to its updated scale.

State and local governments spent less in the first quarter of 2010 on infrastructure projects and new equipment despite a windfall of federal aid, figures released by the Bureau of Economic Analysis on Friday showed.

Essential service, health care, housing, and transportation offerings will dominate the primary market as issuers look to finance a variety of utility needs, hospital facilities, and road and housing projects in a week when new volume is pegged at $7.37 billion, according to Ipreo LLC and The Bond Buyer.