Buy side

Cash influxes into municipal bond mutual funds continued to accelerate last week as state and local government debt rallied amid an upsurge in the broader financial markets.

The municipal market faces a calendar of $4.59 billion of new debt this week, smaller but still sizable, after devouring the $6.5 billion California general obligation sale last week with only a slight uptick in yields, according to data from Thomson Reuters.

The Bond Buyer’s weekly yield indexes were mixed this week, as an onslaught of more than $10 billion of primary market supply dominated the municipal market landscape.

The assets of tax-exempt money market funds fell by $1.32 billion and settled at $484.44 billion for the week ending March 23, according to the Money Fund Report, a service of iMoneyNet.com.

Investors looking to retire in a decade or two wish they could still bank on 8% annual returns on their portfolios.

Banks across the nation managed to slightly increase their holdings of municipal debt in 2008 and reach their highest level of ownership since 1991, despite the turmoil that transformed the securities and banking industries last year, according to annual information compiled by Highline Data LLC.

After digesting a revised $5.23 billion of new issues last week - highlighted by the mostly oversubscribed $1.54 billion Wisconsin state appropriation financing - California this week will leave an even larger footprint in the primary with its planned $4 billion sale of general obligation bonds as volume soars to an estimated $9.25 billion, according to Thomson Reuters.

Cash influxes into municipal bond mutual funds accelerated last week as state and local government debt continued to gain traction among retail investors.

After one week of inflows, tax-exempt money market funds returned to negative territory, losing $7.3 billion for the week ending March 16 with $485.76 billion, according to the Money Fund Report, a service of iMoneyNet.com.

The Bond Buyer’s weekly yield indexes mostly fell this week as the Federal Reserve’s plan to support credit markets by buying Treasuries sparked a rally in state and local government debt.

The municipal bond market continued to grow during the fourth quarter in the face of a global credit crisis as retail investors flocked to high-quality state and local government debt.

Wisconsin is expected to thunder into the market a week early with up to $1.5 billion of state-appropriated securities that will refund outstanding 2002 tobacco bonds and deliver a substantial amount of paper to the Midwest market.

Congress hopes an expansion of the taxable municipal bond market will introduce new types of investors to state and local bonds.

Cash influxes into municipal bond mutual funds slowed again last week as the market continued to pummel state and local government bonds.

When institutional investors and price-evaluation services disagree, bet on the institutional investors.

The total assets of tax-exempt money market funds rose by $3.65 billion to $485.77 billion during the week ending March 9 — only the third time the funds have seen inflows since January, according to the Money Fund Report, a service of iMoneyNet.com.

The Securities Industry Financial Markets Association is phasing out its indexes tracking auction-rate securities as the credit crisis renders the market inactive.

Nearly all The Bond Buyer’s weekly yield indexes rose this week, as the municipal market dealt with a sizeable slate of primary market issuance, and bond prices cheapened slightly throughout the week.

Municipal bonds simultaneously are historically cheap and historically expensive in the current market environment.

Amid brisk trading of Puerto Rico debt in the secondary market, analysts have mixed feelings about the prospect of the commonwealth selling new debt this year.