Buy side

Short-term interest rates near zero are a bonanza for the closed-end fund industry. If only they lasted forever.

Nuveen Investments last month proposed the latest in a proliferation of investment vehicles devoted to Build America Bonds: a BAB closed-end fund.

SAN JUAN — Nearly one year after Puerto Rico implemented its fiscal reconstruction plan to reduce operating costs, generate more tax revenue, and curtail borrowing, investors are both optimistic and cautious.

After digesting more than $6 billion of new volume last week, the municipal market is again expected to make room for an additional $6.28 billion in estimated new supply planned this week, according to Ipreo LLC and The Bond Buyer.

Money continued to flood municipal bond mutual funds at a steady pace last week, as continuing concerns about state and local government credit and a hike in the Federal Reserve’s discount rate did little to deter investors.

Nearly all The Bond Buyer’s weekly yield indexes declined this week, as the municipal market spent much of the last week either in unchanged or slightly firmer territory.

After a seven weeks in the desert, tax-exempt money market funds finally saw a modest trickle of inflows in the week ending Feb. 22. The gain of $187.7 million, raising total assets to $381.75 billion, marked only the second time this year that the funds were on the positive side of the ledger, according to the Money Fund Report, a service of iMoneyNet.com.

Oppenheimer & Co. agreed to buy back from clients tens of millions of dollars of auction-rate securities under settlements with two states announced yesterday.The New York-based investment bank was accused by New York and Massachusetts of marketing ARS as safe, liquid alternatives to cash, without explaining the risks.

For anyone still not convinced that Build America Bonds are transforming state and local government finance, behold a municipal bond mutual fund that has filed a prospectus in French.

WASHINGTON — The Securities and Exchange Commission formally released a series of final changes to its Rule 2a-7 on money market funds Tuesday aimed at boosting the resilience of funds during market crises, and set a March 5 effective date for them.

Muriel Siebert likes municipal bonds.

The river of new money flowing into municipal bond mutual funds shows no sign of subsiding, rebounding the past two weeks after a brief dip at the beginning of the month.

With nearly $7 billion expected in the primary market this week, market participants said appetite for the flood of new issues is expected to be dictated by the pricing and structure of the deals.

Of all the risks facing owners of Build America Bonds, a spike in interest rates is one of the most alarming. Cumberland Advisors thinks it has found a way to neutralize this risk. The Vineland, N.J.-based firm is sympathetic to clients who are buffeted on both sides.

Nearly all of The Bond Buyer's weekly yield indexes increased this holiday-shortened week, as the municipal market mostly cheapened.

Following decreasing outflows last week, tax-exempt money market funds saw losses grow to $3.88 billion for the week ending Feb. 15 as they finished at $381.56 billion, according to the Money Fund Report, a service of iMoneyNet.com.

Illinois and the Los Angeles Unified School District will share the limelight this week with each bringing a billion-dollar deal to market.

Near-zero yields on safe havens continue to feed municipal bond mutual funds.

A handful of states raised income tax rates last year — particularly on the wealthy — as tax receipts suffered a historic plunge.

The Bond Buyer’s weekly yield indexes were narrowly mixed this week, with the municipal market remaining mostly flat as the tone varied throughout the past few sessions.