Buy side

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.

Tax-exempt money market funds lost the inflows they earned last week — and then some — as a result of the $2.82 billion of outflows that fled during the week ended Aug. 17 that caused the funds to settle at $446.12 billion, according to The Money Fund Report, a service of iMoneyNet.com of Westborough, Mass.

Asset managers expect it will take four to seven years to recover the assets under management lost during the economic crisis, according to a study by McKinsey & Co.

With municipal volume down nearly $50 billion so far this year, retail investors are having to look outside their comfort zones to add value to their portfolios, municipal analysts, trading, sales, and underwriting sources said.

With a gusher of new money and seemingly few alluring opportunities on which to spend it, one might guess municipal bond mutual funds would be sitting on a ton of cash.

New York State Attorney General Andrew Cuomo Monday filed fraud charges against Charles Schwab & Co., alleging it misled investors about the risks of auction-rate securities.

The municipal market will get another significant dose of Build America Bonds this week when more than $2 billion of the taxable securities are expected to arrive in the primary market as part of an estimated $7.26 billion in total new-issue volume, according to Ipreo LLC and The Bond Buyer.

Even the most uninviting yields ever on short-term municipal debt cannot stem the tidal wave of cash flooding short-term municipal bond mutual funds.

After seeing slight losses last week, the total assets of tax-exempt money market funds rose by $2.07 billion and settled at $448.94 billion for the week ending Aug. 10, according to the Money Fund Report, a service of iMoneyNet.com of Westborough, Mass.

The Bond Buyer’s yield indexes were mixed this week, as the municipal market experienced little movement, with a good primary market supply and fairly light secondary trading activity.

For an illustration of the global reach of the credit crisis, consider the plight of Narvik, a Norwegian municipality on the banks of the Ofotfjord.

A spike in Treasury rates threatens to stomp out the rally in short-term municipal bonds, investors and analysts say.