Investments

Mutual funds have emerged as the dominant source of selling pressure for state and local government paper in the new year as investors keep pulling out their money, forcing fund complexes to sell bonds into an already jittery market.

Volume will be on the light side again this week, with $3.85 billion coming to market at a time of rising interest rates, poor liquidity, and overall market uncertainty, according to Ipreo LLC and The Bond Buyer.

ALABAMATarrant (City)Jan 12, 2011 . . . . . . $1,655,000

CALIFORNIAHillsborough City School DistrictJan 13, 2011 . . . . . . $143,370,000

The Bond Buyer’s long-term weekly yield indexes rose this week as media reports about the possibility of a string of municipal bankruptcies weighed on ­investors.

Tax-exempt money market funds took in new cash for the second time in as many weeks in 2011, gaining $2.098 billion to boost total net assets to $334.26 billion for the week ending Jan. 10, according to the Money Fund Report, a service of iMoneyNet.com.

ARKANSASConway School District No. 1 of Faulkner CountyJan 12, 2011 . . . . . . $31,410,000

ARIZONAArizona Transportation BoardJan 12, 2011 . . . . . . $158,585,000

Most municipal bond exchange-traded funds in the fourth quarter performed noticeably worse than the indexes they were designed to track. Or, depending on your perspective, they performed noticeably better.

Table as of: 01/11/2011 14:57 PM Invisible Supply Issuer and purpose Amount* Approval

FLORIDATerra Bella Community Development DistrictJan 11, 2011 . . . . . . $3,855,000

ILLINOISCampton TownshipJan 11, 2011 . . . . . . $4,465,000

Table as of: 01/10/2011 12:39 PM Invisible Supply Issuer and purpose Amount* Approval

IOWAWindsor Heights (City)Jan 10, 2011 . . . . . . $440,000

INDIANAIndiana Bond BankDec 16, 2010 . . . . . . $58,485,000

NEW JERSEYAlloway TownshipJan 7, 2011 . . . . . . $114,000

CALIFORNIADublin San Ramon Services DistrictJan 6, 2011 . . . . . . $35,620,000

Investors kept pulling their cash from municipal bond mutual funds at a record pace last week as frightened money continued to flee the market.

CHICAGO — With a round of positive credit action to tout, DePaul University in Chicago will enter the market this month with $165 million of debt that will include its first new-money sale to fund capital projects in more than a decade.

The Northeast will be a focal point of activity this week when the New Jersey Economic Development Authority and the New York City Transitional Finance Authority team up to bring the first two meaty deals of the new year to market.