Dan Seymour

As the expiration of the Build America Bond program loomed last year, the market was wracked with uncertainty about just who was going to buy long-term tax-exempt bonds. Thanks to the drought of new municipal bond issuance in 2011, the market is still wondering.

Municipal bond mutual fund outflows continued to subside last week from recent record-setting levels as the cash most prone to panic appears to have left by now.

The risk-management and trade analytics service announced the launch Tuesday of a service evaluating the illiquidity of municipal bond mutual fund holdings.

Municipal bond mutual fund outflows moderated last week as a nervous market seemed better able to absorb the relentless fund selling.

Climbing the wall of expiring bank guarantees on municipal debt in the coming months may not turn out to be as daunting as anticipated.

Investors established a new record for withdrawals from municipal bond mutual funds last week as headline risk continued to chase people from state and local government debt funds.

The sophisticated investor in retail municipal bonds has ­remained calm the past few months even as mutual funds have dumped state and local ­government debt by the truckload.

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.

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

No sooner did Build America Bonds become orphaned than they caught fire.

Bank of America Merrill Lynch in 2010 reclaimed its title as the top underwriter of municipal debt, thanks mainly to its dominance in the competitive market.

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.

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.

A change in the methodology the Federal Reserve uses to measure who owns municipal bonds has masked the growth in foreign ownership of state and local government debt.

The story in the municipal bond market this month has been bleak. The story in the municipal bond exchange-traded fund ­market has been even bleaker.

Many investors think the expiration of the Build America Bond program would actually be good for existing BABs because the entire universe of taxable bond buyers will be fighting over a finite and relatively small pool of available debt.

Build America Bonds have entered a world of their own. As the market braces for a blitz of taxable state and local government debt sales to close out the year, some experts expect the already-shaky correlations between BABs and other assets to break down.

Money market funds continue to waive big chunks of their management fees as yields on cash instruments remain too low to charge the full amount.

Bank of America Merrill Lynch fended off a summer onslaught from Citi to hold on to the top spot among municipal bond underwriters through three quarters of the year.

The return of bank profitability, coupled with some of the provisions of the federal stimulus, coaxed banks to buy state and local government debt in the first half.