Fixed income

Senior White House economic advisors have told state and local officials that tax-exempt bond interest is “off the table” and will not be part of the administration’s proposed 28% cap on the value of exclusions, deductions and other tax preferences for wealthy taxpayers, sources familiar with the discussions told The Bond Buyer.

Citi Fixed Income Indices and Research Affiliates have come together to develop a new series of investable bond indices based on the Research Affiliates Fundamental Index methodology.

Investors may be wondering where municipal bond yields are headed after they reached 45-year lows last week.

Ratios of municipal to Treasury bond yields over the past three months have shown a degree of volatility that has complicated a standard valuation of tax-exempt debt for investors. Will that trend continue this year?

Muni yields have outperformed those of Treasuries by rallying four to five basis points on the intermediate and long ends of the curve throughout the holiday-shortened week. Meanwhile, equivalent Treasury yields backed up three to four basis points.

When broker-dealers give money to California school bond campaigns, it appears to be money well spent. A review of campaign finance records found a nearly perfect correlation between broker-dealer contributions to California school bond efforts in 2010 and their underwriting subsequent bond sales.

Speculation about widespread municipal credit defaults and bankruptcies sent them running from the tax-exempt market early in the year. Now as 2012 gets under way, mom-and-pop investors are back and looking to glean some of the performance that made the sector shine in the fourth quarter of 2011.

The Internal Revenue Service’s initiative to determine whether municipal bonds are being initially offered at prices that fail to comply with tax requirements has left issuers upset and confused about the definition of issue price and what specific abuses the IRS is looking for.

FINRA has asked the SEC to allow it to assess its muni members quarterly fees based on the par value of their reported transactions to help fund the Governmental Accounting Standards Board, despite protests from issuers and dealers.

A 10-year low of new municipal bond issuance is what was on everyone’s mind in 2011. Last year, only $295 billion of tax-exempt bonds were issued, down almost 32% from 2010 when $433 billion was issued. It was the lowest amount of issuance since 2001.

Beginning Jan. 1, U.S. Savings Bonds will be going digital, saving taxpayers $120 million over the next five years.

State and local governments will be able to issue a total of $32.821 billion of private-activity bonds under a national volume cap next year — 1.2% or $379.96 million more than in 2011.

Bonds.com Group said it raised $16.6 million from a group of investors that includes an entrepreneur that created the first hedge fund in Beirut, Lebanon.

Markit, a specialist in valuations and post-trade processing for swaps and other non-exchange traded products, has launched a service to help US mutual funds and other institutional investors find a fair value for their bonds.

November saw a solid month of new municipal bond issuance for 2011, but it paled in comparison with the same period in 2010, when Build America Bond issuance was particularly strong.

Three investment chiefs talk stocks, sectors and the economy.

"Frank's loss will be felt by generations of Goldman Sachs professionals," Lloyd C. Blankfein, chairman and CEO of Goldman Sachs, said.

An industry group has asked regulators to disclose the factors they will use to determine which muni broker-dealers pose more risks and should undergo compliance examinations more often under a new proposed exam program.

Traders anticipate that the recent delicate balance between supply and demand in the muni market will be maintained even as issuance ramps up this week in the face of rollover funds.

Investors seeking diversity, liquidity and competitive yields when compared to other fixed-income products are trying a relatively new alternative: municipal bond exchange-traded funds.