Recent Commentary
MMA Muni Outlook > August 2009
Market Summary
Extraordinary August For Municipals
After a firm July, the month of August produced extraordinary gains, capping the strongest Summer rally since 2004. Municipal returns ranged from 1% to 2% depending on the benchmark, and high-yield funds produced exceptional advances. The month’s strength emerged tentatively but the upward trend was reinforced by aggressively priced primary loans led by $235M MD GO’s and $299M MN GO’s. The two issues provided not only primary pricing guidance but also focused secondary transactions that facilitated confidence among dealers to mark inventories, even though trade volume was light all month.
Primary issuance was $33B, but nearly 1/3 of the issuance were taxable Build America Bonds (BAB). The reduction in available investment-grade tax-exempt securities and the perception (supported by several states) that higher income taxes are inevitable, increased direct purchases of bonds by individuals and sustained the positive inflows into municipal bonds funds... (For continuation of Outlook, click link below.)
Full Report: MMA Muni Outlook for August 2009
