Fixed income

Citi and Bank of America Merrill Lynch continued to vie for the top underwriting position in the municipal bond industry, according to mid-year rankings from Thomson Reuters.

The turbulence that’s battered financial markets in recent weeks reduced the volume of municipal bonds sold in June to the lowest level that month has seen in 10 years.

Federal regulators would spend months, if not years, implementing the sweeping changes to the municipal market that were outlined in the financial regulatory reform legislation finalized by House and Senate negotiators late last week.

As the buyer base for Build America Bonds continues to expand, Fitch Ratings has created a website so investors unfamiliar with the municipal market can visit a "one-stop shop" for all BAB-related research.

Yields on floating-rate municipal prepaid gas bonds with ties to BP have spiked to nearly 9% from less than 0.5% as credit analysts continue to cut their ratings on the oil giant.

Iowa, an earlier user of Build America Bonds, won't draw on that program again for two upcoming sales because the savings are not worth the worries over heightened scrutiny from the Internal Revenue Service, Treasurer Michael Fitzgerald said yesterday.

Proposed extensions to major bond provisions have survived several revisions of pending tax legislation, but municipal market participants are wondering if more controversial, non-bond provisions could scuttle the entire package.

Wells Fargo is merging nearly $2.2 billion of Evergreen Investments municipal bond mutual funds into existing Wells funds as part of the bank’s purchase of Wachovia.

Illinois’ debt manager returns tomorrow from an overseas tour where he sought to whet the appetites of European and Asian institutional buyers for his beleaguered state’s paper ahead of a $900 million taxable Build America Bond sale.

A two-year extension to the Build America Bonds program, as well as extensions to a handful of other bond provisions set to expire at the end of the year, remain in legislative limbo as Senate Democratic leaders this week continue attempts to produce a tax bill that they can pass.

The sovereign debt crisis in Europe is coupling with the general malaise in financial markets to make life easier for tax-free money market funds by boosting key short-term interest rates.

Invesco PowerShares plans to launch its second exchange-traded fund devoted to Build America Bonds, highlighting both the proliferation of municipal ETFs and the growing importance of taxable state and local government debt.

The Securities and Exchange Commission is stepping up its enforcement efforts in the municipal securities market for the first time in more than a decade, with a staff of roughly 30 attorneys charged with investigating and trying muni and public pension fund cases.

Senate Republicans have proposed an alternative bill to extend expiring tax-law provisions that would not include Build America Bonds, a major difference from pending legislation, which would extend the BAB program by two years while gradually reducing its subsidy rate to 30% from 35%.

Household ownership of municipal bonds catapulted over the $1 trillion mark for the first time ever in the first quarter of 2010. Meanwhile, foreign investors seeking a greater footprint in the municipal market via taxable Build America Bonds held $71.9 billion in their largest-ever presence in the market, according to new Federal Reserve data released yesterday.

Aiming to strengthen its specialty public finance business, Minneapolis-based Piper Jaffray & Co. continues to expand its coverage with four new hires and two new offices.

Dealers are calling for the Municipal Securities Rulemaking Board to revise and clarify several aspects of draft interpretive guidance that outlines the steps they must take to ensure the prices they charge customers when buying and selling municipal securities are fair and reasonable.

Municipal issuers are overreacting to recent developments surrounding the compliance program for Build America Bonds, a Treasury official said yesterday in an effort to tamp down ongoing concerns.

Potential scenario of many years of rising interest rates will devalue long-term bonds—and open investors’ and advisors’ eyes to fixed income risk.

A Treasury Department official Monday said that federal regulators already have attempted to assuage muni market participants’ worries about how to determine issue price for Build America Bonds in guidance issued in April, even though issuers continue to air concerns about the lack of guidance.