Public finance

MFS Investment Management's Municipal High Income Fund is a gem of consistency. In late December 2010, it was sporting a 4.57% year-to-date return — good enough to lead the average performance of its peers by three-quarters of a percentage point.

MISSISSIPPIMississippi Development BankDec 21, 2010 . . . . . . $10,395,000

Record municipal bond mutual fund redemptions have emerged as a threat to the rally most market participants expected to kick off early next year, as the anticipated slowdown in the supply of new bonds is met with a wave of selling by mutual funds.

CALIFORNIAABAG Finance Authority For Nonprofit CorporationsDec 23, 2010 . . . . . . $3,855,000

The municipal bond market will be asked to digest a single small deal this week as a welcome lull in new supply continues through the holidays.

INDIANAHighland (Town)Dec 22, 2010 . . . . . . $2,950,000

CALIFORNIAABAG Finance Authority For Nonprofit CorporationsDec 22, 2010 . . . . . . $7,000,000

All The Bond Buyer’s long-term weekly yield indexes declined this week in the wake of Friday’s rally, during three lightly traded sessions in advance of the upcoming Christmas closure.

The tax-free money market fund industry continues to shrink rapidly, squeezing what had been a major source of short-term credit for municipalities and arguably leading to higher borrowing costs for state and local governments.

MASSACHUSETTSLawrence (City)Dec 21, 2010 . . . . . . $3,362,450

ALABAMATuscaloosa County Industrial Development AuthorityDec 21, 2010 . . . . . . $50,000,000

Municipal credit analysts are spending more time evaluating a risk few used to give much thought to: a municipality's loss of market access for refinancing short-term debt.

ARKANSASFouke School District No. 15 of Miller CountyDec 20, 2010 . . . . . . $660,000

DISTRICT OF COLUMBIADistrict of ColumbiaDec 17, 2010 . . . . . . $26,000,000

Table as of: 12/17/2010 12:58 PM Invisible Supply Issuer and purpose Amount* Approval

MASSACHUSETTSSaugus (Town)Dec 17, 2010 . . . . . . $2,548,000

ARIZONAPima County Metropolitan Domestic Water Improvement DistrictDec 16, 2010 . . . . . . $6,630,000

Investors continued to ferry cash out of their municipal bond mutual funds at historic rates last week as a tumultuous sell-off sowed fear among buyers.

The flood of new supply that has inundated the municipal bond market the past month will die out this week as issuers take a breather from selling new debt.

INDIANAClark CountyDec 16, 2010 . . . . . . $1,450,000