Fixed income

Martin Kanefsky, the former owner and chief executive officer of a Great Neck, N.Y.-based firm that helped municipal issuers secure guaranteed investment contracts for their bond proceeds, pleaded guilty to participating in two separate fraud conspiracies as well as wire fraud, the Justice Department announced Thursday night.

Since the beginning of the year, Wall Street firms, trade associations, and municipal bond issuers have significantly stepped up their lobbying efforts to get lawmakers to extend the Build America Bonds program before it expires at the end of December.

Four major municipal market groups are urging the Treasury Department to issue guidance confirming that the existing regulatory framework on issue price for tax-exempt bonds also applies to Build America Bonds and stating that if issuers follow certain long-standing practices, they can be confident they are complying with the rules in this area.

As the State of Wisconsin Investment Board continues a push toward risk aversion, its staff laid out new goals for the fixed-income portfolio that would look to find additional alpha minus any apparent investment hazard.

Treasury panel offers its take.

Charles Schwab announced on Thursday three new, low-cost bond exchange-traded funds with no online trading commissions for Schwab clients.

Natalie Cohen was hired to study muni bonds as head of the research and economics department.

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.

Issuance of Build America Bonds fell precipitously last month, but overall volume still managed to outpace market issuance in July 2009, according to preliminary data from Thomson Reuters.

Rate Climate Spurs Fewer Waivers.

House Ways and Means Committee chairman Sander Levin Wednesday introduced a new bill that enables Congress to make another attempt at extending several bond provisions slated to expire at the end of the year, including Build America Bonds.

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.

The Municipal Securities Rulemaking Board is wrestling with how much it needs to increase its staff, technological capability, and funds to implement provisions of the new financial regulatory reform law that require it to make the most expansive changes since its creation in 1975.

The legislation by Rep. Scott Garrett, R-N.J., would establish a regulatory framework for covered bonds, including a regime to handle the failure of a bond issuer.

House Ways and Means Committee chairman Sander Levin plans next week to unveil new jobs legislation that would extend Build America Bonds and other muni bond initiatives that are set to expire at the end of the year.

Even as Build America Bonds continue to transform municipal finance, one thing stays constant: hedging a portfolio of muni securities remains very difficult.

WASHINGTON — The Municipal Securities Rulemaking Board is considering temporarily expanding its 15-member board, possibly by two to four members, as it transitions to majority-public membership by Oct. 1 to comply with the new financial regulatory reform law.

George Friedlander has rejoined Citigroup as head of municipal strategy.

Two new Standard & Poor’s indexes tracking municipal bonds launched yesterday, paving the way for Vanguard to enter the municipal exchange-traded fund business.

Municipal bond mutual funds’ assets climbed to a new record total as they continue to command new money from investors in spite of low yields and a nonstop wave of bad headlines in the mainstream press over state and local government credit.