Fixed income

A growing number of U.S. cities are choosing to fund essential services like public safety and garbage collection over making payments on their outstanding debt, as rising costs and falling revenue deplete their budgets.

The financial advisor industry has expanded its share of bond deals advised over the last 13 years. Simultaneously, the top-10 firms’ share of the FA business has gone up and down and up again, but in the long term seems generally to be increasing.

FINRA slammed Citi International Financial Services with a $600,000 fine for charging excessive markups and markdowns on corporate and agency bond transactions.

With interest rates at historic lows, figuring out fixed-income strategies for clients is no simple task. And never mind what can happen when inflation picks up.

Unable to shed a downward trend that first began early last year, ownership of municipal bonds by households fell to the lowest level in two years as it continued to decline in the fourth quarter of 2011, according to quarterly data recently released by the Federal Reserve Board.

High-yield bonds may sound risky, but they have some advantages in the current market environment, according to a BlackRock report.

Mutual funds started February with a roar but ended the month with a whimper.

The Municipal Securities Rulemaking Board has proposed rule changes and interpretive guidance aimed at ensuring that underwriters and dealers comply with an issuer’s instructions to sell bonds to retail investors during retail order periods.

Seoul, Korea-based Mirae Asset Global Investments unveiled its Global Dynamic Bond Fund, which will bet on sovereign, quasi-sovereign and corporate bonds from issuers in both emerging and developed markets, for U.S. investors.

The municipal market for the month of February continued its upswing in new issuance of long-term bonds from one year earlier.

Investors have not yet fully recovered their faith in long-term U.S. mutual funds, but the cash outflow in January was not nearly as bad as the previous month.

The Municipal Securities Rulemaking Board has released a long-range plan to improve transparency in the muni market by collecting a wide range of new information from a variety of sources, integrating that data on the Electronic Municipal Market Access system, and making it available to investors and other market participants in a more user-friendly and searchable format.

Investors continued to steer money into stock mutual funds in February, though with much less enthusiasm. According to statistics released today by the Investment Company Institute, investors placed an estimated $1.04 billion into equity funds during the week ended Wednesday, Feb. 15, less than half the $3.64 billion they poured into the funds a week earlier.

A Financial Industry Regulatory Authority arbitration panel ordered Memphis-based Morgan Keegan & Co. to pay a Birmingham investor $1.95 million for misrepresenting that the Jefferson County, Ala., sewer bonds he purchased were safe, liquid and tax-free investments.

A sports agent, whose company represents star clients including Denver quarterback Tim Tebow, won $400,000 in a ruling against brokerage Morgan Keegan & Co., due to personal losses from bad bond investments.

The Government Accountability Office report on muni bond transactions released in January said that retail investors paid an average 2.5% markup when buying $5,000 worth of municipal securities in the secondary market.

Seventeen muni groups are urging members of Congress to reject President Obama's proposal to place a 28% cap on the value of tax-exempt interest, warning it will hurt the market and that its retroactivity will reverse nearly 100 years of legislative history.

President Obama’s fiscal 2013 budget will propose a 28% cap on the value of tax preferences, including tax-exempt interest for municipal bonds, according to knowledgeable sources.

A positive outlook for 2012 is based on budget improvements at the state and local level

The Municipal Securities Rulemaking Board is urging the Federal Reserve Board, the SEC and other financial regulators to exempt all municipal securities from the Volcker Rule, warning the failure to do so would bifurcate and hurt the municipal market without increasing the soundness of the banking system.