Buy side

Two deals over $1 billion — one in New York and one in California — will vie for investors’ attention this week as the largest being priced, as activity begins to slow down ahead of the Thanksgiving holiday next week.

Municipal bond mutual funds last week continued to command new money at a pace that was still high but not quite as high as earlier this year.

The Bond Buyer’s weekly yield indexes were mixed during this holiday-shortened week.

Parents picking a charter school for their children want a school they can be confident will not close down. Bondholders want much the same thing.

On the heels of hefty outflows last week, the assets of tax-exempt money market funds dipped by just $649.8 million to settle at $411.57 billion for the week ending Nov. 9, according to the Money Fund Report, a service of iMoneyNet.com.

Brightening economic prospects and improving liquidity helped lift the municipal bond market in the third quarter in spite of numerous credit concerns and the evisceration of the bond insurance industry, according to the Securities Industry and Financial Markets Association’s quarterly report on municipal credit.

The worst economic downturn since the Great Depression has forced many state and local government budgets into a widely publicized vise.

David Rubin, founder of CDR Financial Products Inc., and two colleagues on Friday pleaded not guilty to criminal antitrust, wire fraud and other charges stemming from an alleged conspiracy to rig bids for municipal investment agreements and derivatives contracts for kickbacks.

For the third week in a row, a California issuer will dominate the primary market spotlight with a $1.5 billion financing.

Investors bequeathed another more modest sum of cash to municipal bond mutual funds last week, offering further evidence that the blitz of new money barraging the industry has eased to a more moderate pace.

At least one demographic is yet to trumpet the end of the recession: local governments.

The Bond Buyer’s weekly yield indexes rose this week amid a heavy onslaught of new issuance, mainly out of California, and a mostly unchanged secondary market.

Tax-exempt money market funds inched down further again this week, dropping $2.74 billion to $412.22 billion for the week ending Nov. 2, according to the Money Fund Report, a service of iMoneyNet.com.

The secret may be out. Municipal closed-end funds are unique and compelling because they give investors the opportunity to buy a basket of municipal bonds at a discount from market value.

The cascade of cash washing into municipal bond mutual funds all year picked up again last week, suggesting the dip in new money in mid-October may have been a blip.

After digesting a revised $7.67 billion in new volume last week, the municipal market will face an estimated $9.59 billion this week, according to Ipreo LLC and The Bond Buyer, as the California market again takes center stage — this time with a $1.5 billion sale of general obligation bonds catering to retail investors.

Assets of tax-exempt money market funds declined by $2.93 billion and ended at $414.96 billion for the week ending Oct. 26, according to the Money Fund Report, a service of iMoneyNet.com.

When taxable Build America Bonds were introduced to the market in April, one attraction for issuers was said to be the wider investor base they would garner, in contrast to the limited market for traditional, tax-exempt municipal bonds. But while BABs have been successful in expanding liquidity in the muni market, purchases from abroad remain relatively shallow.

The Bond Buyer’s weekly yield indexes rose this week amid light trading in the secondary market, as a flood of issuance in the new-issue market captured participants’ attention and focus.

Barclays Global Investors plans to launch a family of municipal bond exchange-traded funds designed to behave more like munis themselves by liquidating at maturity.