Buy side

Outflows to the tune of $948.2 million caused tax-exempt money market funds to end the week of Jan. 11 with total assets of $401.29 billion, after starting 2010 the previous week with inflows of nearly $3 billion, according to the Money Fund Report, a service of iMoneyNet.com.

Among the many metamorphoses the advent of taxable Build America Bonds was anticipated to induce in the tax-exempt municipal bond market, one of the most important was the flattening of the yield curve.

Long-term municipal bonds have demonstrated unusual resilience against the market’s walloping of Treasury bonds in the last six weeks.

After breaking every record for garnering new money from investors in 2009, municipal bond mutual funds kicked off 2010 by taking in still more.

Municipal issuers this week will unveil several large deals — anchored by a $900 million Pennsylvania general obligation offering — on the heels of last week’s equally hefty post-holiday slate.

BlackRock Friday threw a new type of product into the mix in the rapidly growing and evolving municipal bond exchange-traded fund industry.

Most of The Bond Buyer’s weekly yield indexes increased this week as municipals came out of the holiday doldrums with losses outweighing gains, but with buyers returning to the market.

Tax-exempt money market funds rang in 2010 with $2.60 billion of inflows and total assets of $402.24 billion for the week ending Jan. 4, according to the Money Fund Report, a service of iMoneyNet.com.

As if municipal bond closed-end funds needed any more help, the year-end tax selling that customarily plagues the industry every December took the year off in 2009.

In the first week of 2009, nobody had heard of Build America Bonds. In the first week of 2010, they rule the municipal bond market.

Cash continues to run off the sidelines as investors lose patience with the minuscule returns offered by short-term safe havens.

Most of The Bond Buyer’s weekly indexes increased slightly during this holiday-shortened week, with the market largely inactive and firmly entrenched in the holiday doldrums.

State and local government tax receipts plunged again in the third quarter as municipalities continued to feel the squeeze from shrinking incomes and tepid sales.

Money market funds coughed up more cash last week as investors continued to embrace risk amid signs of a stabilized economy.

One of the craziest, most transformative years ever in state and local government finance will end with a whimper this week. Municipalities are slated to sell just $74.1 million of bonds this week, according to data from The Bond Buyer and Ipreo LLC, after having floated $611.7 million last week.

The Bond Buyer's weekly yield indexes rose last week as a weaker tone permeated the municipal market throughout the holiday-shortened set.

Although Bank of America Merrill Lynch does not foresee municipals repeating this year's performance in 2010, the bank's strategists see a few prominent roles for municipals in their main investment themes for the year.

Municipal bond mutual funds keep garnering new money at a steady clip as investors continue to grow bored waiting on the sidelines.

Even as the approaching holidays are expected to put a seasonal damper on primary market supply, New York's Liberty Development plans to begin marketing $2.59B of escrow bonds tomorrow to meet a year end deadline to sell Liberty bonds for redevelopment of the World Trade Center site.

Most of The Bond Buyer's weekly yield indexes declined slightly this week, despite weakness in the municipal secondary market through Tuesday.