Buy side

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.

The stream of money flowing into municipal bond mutual funds picked up a little last week, but investors continue to cash out of short-term funds even past tax season.

Nearly all of The Bond Buyer’s weekly yield indexes declined this week amid a light new-issue calendar and somewhat lackadaisical interest in the secondary.

Tax-exempt money market fund outflows ebbed by nearly $1 billion this week, but still saw $4.44 billion pour out of the market as funds settled with $358.65 billion in total assets for the week ending April 26, according to the Money Fund Report, a service of iMoneyNet.com.

California’s general obligation bonds have caught fire since Moody’s Investors Service and Fitch Ratings slapped higher ratings on the state’s credit earlier this month.

Wherever the money’s going, it’s not going to municipal bond mutual funds.

Volume will be noticeably lighter and smaller-sized offerings will take the spotlight this week in lieu of the meatier deals that have dominated primary activity recently.

WASHINGTON — The Financial Industry Regulatory Authority announced yesterday that it has fined HSBC Securities Inc. $1.5 million and U.S. Bancorp Investments Inc. $275,000 to settle sales-practice violations for municipal and other auction-rate securities the firms sold to retail customers.

All of The Bond Buyer’s weekly yield indexes on long-term debt declined this week, as municipals firmed up in nearly every session.

Tax-exempt money market funds posted the second-largest outflows of the year — and more than doubled last week’s losses — as the total invested fell $5.42 billion to $363.09 billion in net assets for the week ending April 19, according to the Money Fund Report, a service of iMoneyNet.com.

Many of the biggest property and casualty insurers have been paring their holdings of municipal bonds to shield themselves from exposure to troubled state and local government credit.