Buy side

SAN FRANCISCO — Build America Bonds rapidly gained investor acceptance in their first four months in the market, but they continued to trade differently from traditional municipal bonds during that period, according to preliminary findings from Loop Capital Markets.

The Bond Buyer’s weekly yield indexes declined this holiday-shortened week, as the municipal market grew firmer in most of the week’s sessions, with the majority of the gains situated on the long end of the curve.

After seeing money flee in recent weeks, tax-exempt money market funds inched up slightly by $1.29 billion for the week ending Sept. 7 to settle at $442.70 billion, according to the Money Fund Report, a service of iMoneyNet.com.

The trend of money moving into longer-term municipal bond mutual funds continued last week as the pace of inflows remained near historic highs by every measure.

Supply-hungry investors will face a thin calendar of post-holiday fare as an estimated $2.99 billion is expected to enter the municipal market this week, according to Ipreo LLC and The Bond Buyer.

Closed-end municipal bond funds have come screaming back to life as the confluence of cheap financing costs and hearty long-term rates has bolstered dividends and lured investors to tax-equivalent yields of often 10% or more.

The Bond Buyer’s weekly yield indexes declined this week, as gains on the long end of the municipal yield curve helped carry tax-exempts to a firmer footing, despite a quietening of activity ahead of the forthcoming three-day holiday weekend.

Tax-exempt money market funds both saw outflows and set record-low yields for the week ending Aug. 31 on the heels of losing very little cash and yields remaining unchanged the previous week, according to the Money Fund Report, a service of iMoneyNet.com.

When Nassau County, N.Y., goes to market today with a $110 million competitive deal, it will follow a trend that has emerged since the creation this year of the taxable Build America Bonds program.

The tremendous sums of cash landing in municipal bond mutual funds have started hitting longer-term funds as investors reach for better yields and feel more comfortable with the outlook for inflation.

BlackRock Inc. made a big splash in the exchange-traded funds business this summer with its purchase of the investment unit of Barclays Global Investors, and analysts and executives are waiting for the next shoe to drop.

Call it the calm after the storm of taxable Build America Bond issuance.

While tax-exempt money market funds remained at record-low yields of 0.10%, they saw $17.3 million of outflows and settled at $446.10 billion in total assets for the week ending Aug. 24. The outflows were miniscule compared to the $2.82 billion that fled the funds the previous week, leaving $446.12 billion in assets, according to the Money Fund Report, a service of iMoneyNet.com.

The Bond Buyer’s weekly yield indexes declined this week on firmness the last two sessions following an unchanged start to the week, amid decent secondary trading activity on the long end of the curve and little interest on the short end.

Wells Fargo & Co. has launched an index tracking the performance of Build America Bonds, the hottest sector in government finance.

Wall Street's M&A business for asset management companies will be fueled by strategic expansion purchases and corporate divestitures over the coming year, according to a new survey by Jefferies Putnam Lovell.

NEW YORK - Wells Fargo & Co. has launched an index tracking the performance of Build America Bonds, the hottest sector in government finance.

Billion-dollar deals from issuers in California and Texas will dominate the municipal market this week on the heels of two similar offerings that priced last week, and at a time when investors continue to clamor for paper in the face of a nearly $50 billion supply shrinkage this year.

The prospect of higher taxes and impatience with yields available on cash continued to compel unparalleled amounts of money into municipal bond mutual funds last week.

The fees issuers pay to bankers to underwrite municipal bonds are higher then they’ve been for eight years, as the financial crisis heightened risk and decimated competition in the industry.