Public finance

While Build America Bonds have limited the supply of tax-exempt issuance, strong demand from retail investors is also playing a vital role in lowering issuers’ borrowing costs to historic lows.

Table as of: 07/30/2010 17:17 PM Invisible Supply Issuer and purpose Amount* Approval

NEW JERSEYSeaside Heights BoroughJul 29, 2010 . . . . . . $337,862

CALIFORNIACalifornia Municipal Finance AuthorityJul 30, 2010 . . . . . . $110,675,000

Market gains and new money from investors continued to push municipal bond mutual funds’ assets to records last week.

Minnesota will lead a modest slate of new state and local government debt issuance this week as it comes to market with a competitive $865 million general obligation deal.

ARKANSASEarle Special School District of Crittenden CountyJul 29, 2010 . . . . . . $2,160,000

ALABAMAJacksonville Water Works, Gas and Sewer BoardJul 28, 2010 . . . . . . $4,355,000

Tax-free money market funds suffered a big exodus of cash last week as investors continue to grow disgruntled with paltry yields.

Nuveen Investments announced plans Thursday to purchase First American Funds’ long-term asset business as part of a strategy to offer a more diverse suite of products to investors.

Money market funds are taking advantage of higher short-term interest rates the past few months to reclaim some of the management fees they have been waiving to avoid negative yields.

Nearly all The Bond Buyer’s weekly yield indexes declined this week, finishing off a mostly-firmer period with hints of ­weakness.

ALABAMAHoover City Board of EducationJul 28, 2010 . . . . . . $117,325,000

ARIZONARoosevelt Elementary School District No. 66Jul 27, 2010 . . . . . . $39,000,000

ARIZONATolleson Union High School District No. 214Jul 27, 2010 . . . . . . $6,500,000

CALIFORNIAJohn C. Fremont Healthcare DistrictJul 27, 2010 . . . . . . $2,000,000

Buoyed by the strength of the long-term municipal market over the past 18 months, mutual fund assets have climbed to record levels, and portfolio managers have had little need to make major changes to their current investment strategies.

After scrambling to sew up $84 billion in budget holes for the new fiscal year, states already face as much as $149 billion in new shortfalls during the next three, according to a report Tuesday from the National Conference of State Legislatures.

IDAHOHailey (City)Jul 26, 2010 . . . . . . $3,425,000

ILLINOISMattoon Community Unit School District No. 2Jul 26, 2010 . . . . . . $2,765,000