Buy side

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.

The primary market should be fairly brisk this week as the new-issue calendar includes two California deals each larger than $1 billion, a handful of Build America Bond issues, short-term notes, variable-rate bonds, and a generous helping of long-term essential service issues.

It appears the wave of cash flooding the industry all year may have finally crested.

The Bond Buyer’s weekly yield indexes were mixed this week, as municipals were little changed following last week’s sell-off, which prompted a number of issuers to pull scheduled refunding deals from this week’s primary.

The assets of tax-exempt money market funds declined by $2.70 billion and settled at $417.89 billion for the week ending Oct. 19, according to the Money Fund Report, a service of iMoneyNet.com.

A little more than a year ago, precisely at the time people were scrambling to protect the value of their municipal bonds, hedging to protect the value of munis became untenable.

Three professors from Willamette University have published a study reaching a surprising conclusion — municipalities do not sell more bonds when federal tax rates go up.

As exchange-traded funds continue to grow in scope and popularity, investment experts warn that some products, such as leveraged and inverse ETFs, may be too dangerous for all but the most experienced investors.

The sell-off in municipals last week finally stemmed the tide of cash that had flooded municipal bond mutual funds for the better part of a year.

Issuers plan to price an estimated $11.69 billion of new deals this week, according to Ipreo LLC and The Bond Buyer. Participants are hoping the market continues to recover some of the ground it gave up last week when weakness put a damper on primary activity as yields rose by at least 10 basis points in the intermediate slope of the curve and forced postponement of at least two large deals.

All The Bond Buyer’s weekly yield indexes for long-term debt climbed this week, as muni yields continued to push higher, even increasing by as much as 10 basis points in spots Wednesday, prior to finally stabilizing yesterday.

Outflows totaling $3.06 billion caused tax-exempt money market funds to dip to $420.59 billion in total assets during the week ending Oct. 12, according to the Money Fund Report, a service of iMoneyNet.com.