Reuters- A Blue River municipal bond fund whose heavy selling battered the market last week on Monday got new cash, according to JPMorgan, which said it had persuaded new and existing investors to invest.
Blue River was was one of the three hedge funds that sold billions of dollars of muni bonds last week, pushing the $2.6 trillion muni market to nearly five-year lows. The hedge funds were forced to sell because their borrowing costs jumped due to concerns about troubled U.S. bond insurers.
By Monday, these discounts had prompted inquiries from potential new buyers, traders said, though they still feared the selling was not yet over. Other hedge funds that also have big paper losses might be tempted to sell if the market improves, explained George Strickland, managing director at Thornburg Investment Management in Santa Fe, New Mexico
