Tuesday, June 28, 2017

Corporate Bond Market

US Equity Futures are off to start the day with the DJ Futures -25 and the S&P Futures -3.50. The global tone is mixed with European equities weaker and Asian equities mixed through the overnight. US Treasuries are weaker with yields on the 10yr last at 2.167% and crude oil is up; last quoted $43.87/barrel. Credit is tighter with the Investment Grade Index showing 42.4/43.7 and cash is also stronger.

In credit news, yesterday’s primary market saw $3.65bn priced from 7 issuers in Investment Grade Credit; June’s tally is up to $72.225bn. 3 deals pried in High Yield for $2bn; YTD issuance totals $138bn. From yesterday’s new deals, we are active in CBS, Sirius, Athene Global Funding and Indiana Michigan Power.

In other corporate news, Google received a record 2.4 billion-euro ($2.7 billion) fine from European Union enforcers who say the search-engine giant tilted marks to prevent smaller shopping search services.  

Municipal Bond Market

Munis finished stronger on Monday as the yield on the 10-year benchmark GO fell one basis point to 1.85%. While there were not any significant deals that priced yesterday, the upcoming calendar is estimated to be at $6.82 billion ($5.16 billion of negotiated deals and $1.66 billion of competitive sales). Today Morgan Stanley will price the Dormitory Authority of the State of New York’s $1.72 billion of general purpose state personal income tax revenue bonds for retail investors in a deal rated Aa1 by Moody’s and AAA by S&P. We will also see Wells Fargo price the Missouri Health and Educational Facilities Authority’s $375 million of taxable educational facilities revenue bonds for the Washington University in a deal rated Aa1 by Moody’s.

Thursday, June 22, 2017

Corporate Bond Market

US Equity Futures are down to start the session with the DJ Futures -13 and the S&P Futures -1.75. The global tone is mixed with European and Asian equity markets mixed through the overnight. US Treasuries are stronger with yields on the 10yr last at 2.15% and crude oil is up; last quoted $42.75/barrel. Credit is wider with the Investment Grade Index showing 44.78/46.06 and cash is tighter.

In credit news, yesterday’s primary market saw $11.45bn priced from 5 issuers in Investment Grade Credit; June’s tally is up to $68.075bn. YTD High Yield issuance totals $135bn. From yesterday’s new deals, we are active in EDP Finance, Owens Corning and Suntory Holdings.

In economic data, Initial Jobless Claims rose to 241,000 outpacing survey estimates of 240,000 and Continuing claims also grew larger than survey estimates. Later, FHFA Monthly House Price Index will be reported followed by Consumer Comfort and Economic Expectations.

Municipal Bond Market

For a third straight day, munis finished unchanged as the biggest non-rated deal of the year finally came to market. Goldman was given the opportunity to price Wisconsin’s Public Finance Authority’s $1.09 billion revenue bonds for the American Dream Project in the New Jersey Meadowlands. According to market sources, the deal was oversubscribed by about 1.5 times in spite of a week-long delay to price the deal. The $800 million of tax-exempt limited obligation PILOT revenue bonds were priced at par to yield 5% in 2027, as 6.5’s to yield 6.25% in 2037, as 6.75’s to yield 6.375% in 2042, and as 7’s to yield 6.625% in 2050. The $268.4 million of tax-exempt bonds were priced as 6.25’s to yield 6.385% 2027 and as 6.75’s to yield roughly 6.861% in 2031. Last but not least, the $18.6 million of taxable bonds were priced at par to yield 5.625% in 2024.

Wednesday, June 21, 2017

Corporate Bond Market

US Equity Futures are down to start the session with the DJ Futures -12 and the S&P Futures -4.50. The global tone is mixed with European equities trading down and Asian markets mixed through the overnight. US Treasuries are a bit weaker with yields on the 10yr last at 2.16% and crude oil is down; last quoted $43.61/barrel. Credit is wider with the Investment Grade Index showing 43.58/44.86 and cash is tighter.

In credit news, Monday’s primary market saw $1.5bn priced from 3 issuers in Investment Grade Credit; June’s tally is up to $56.625bn. In High Yield, First Quality Finance and Carrols Restaurant priced new deals yesterday. YTD High Yield issuance totals $134.8bn. From yesterday’s new deals, we are active in Jackson National Life and First Quality Finance. Today’s primary market is hoping to rebound from a light couple sessions to start this week. There are deals from Charter, Westpac and Suntory Holdings on the calendar for today’s business.

In economic data, MBA Mortgage Applications grew 0.6% last week and May’s Existing Homes Sales will be reported this morning.
 
Municipal Bond Market

Munis finished unchanged for the second day in a row despite the 10-year Treasury declining a couple basis points to 2.15%. Traders saw some competitive bond deals come to market including the states of Georgia and Massachusetts and Chicago's O'Hare airport. $1.4bn Georgia GO’s were sold in 4 separate offerings all rated triple-A by Moody’s, S&P, and Fitch. Merrill won the $430.53 million of Tranche 2 GO’s with a true interest cost of 3.06% in an issue priced as 5’s to yield from 1.94% in 2028 and 3’s to yield 3.261% in 2037. Morgan Stanley won the $358.11 million of Tranche 1 GO’s with a true interest cost of 1.46% in addition to winning the $352.45 million of refunding GO’s with a true interest cost of 1.899%. Unfortunately, pricing information on these deals was not available. Last but not least, Wells Fargo won the $273.45 million of taxable GOs with a true interest cost was 2.99%. The issue was priced as 4’s to yield 1.25% in 2018 to 3.15% at par in 2033 and a 2037 maturity was priced at par to yield 3.30%.

Tuesday, June 20, 2017

Corporate Bond Market

US Equity Futures are slightly weaker to start the session with the DJ Futures -13 and the S&P Futures -2.50. The global tone is mixed with European equities trading mixed and Asian markets lower through the overnight. US Treasuries are stronger with yields on the 10yr last at 2.17% and crude oil is down; last quoted $43.06/barrel. Credit is tighter with the Investment Grade Index showing 42.84/44.11 and cash is wider.

In credit news, Monday’s primary market saw $6.225bn priced from 5 issuers in Investment Grade Credit; June’s tally is up to $55.125bn. In High Yield, Intelsat and Surgery Center priced new deals yesterday. YTD High Yield issuance totals $134.36bn. From yesterday’s new deals, we are active in Argentina and FirstEnergy. Today is expected to be another active day in the primary market with deals announced from: First Quality Finance and Jackson National Life

Municipal Bond Market

Despite Treasuries being weaker on Monday, munis finished the day unchanged. All eyes were on the New York City Transitional Finance Authority’s $850 million of tax-exempt secured subordinate bonds which were brought to market by Loop Capital. The deal, which was rated Aa1 by Moody’s and AAA by S&P and Fitch, was priced for retail as 3’s to yield from 1% in 2019 to about 3.317% in 2038, a 2043 maturity was priced as 5’s to yield 2.96%, and a 2044 maturity was priced as 4’s to yield 3.27%. This week’s calendar is $11.8 billion which is composed of $7.74 billion in negotiated deals and $4.04 billion of competitive sales.

Monday, June 19, 2017

Corporate Bond Market

US Equity Futures are strong to start the week with the DJ Futures +76 and the S&P Futures +8. The global tone is mostly positive through the overnight with European equities trading higher and Asian markets mixed. US Treasuries are slightly higher with yields on the 10yr last at 2.143% and crude oil is also up; last quoted $44.87/barrel. Credit is slightly weaker with the Investment Grade Index showing 43.09/44.36 and cash is a bit tighter.

In credit news, last week’s primary market saw just shy $15bn priced from domestic issuers in Investment Grade Credit; June’s tally is up to$48.9bn. The consensus for June is about $97bn in total new issue credit. From last week’s new deals, we are active in BrightHouse Financial. This week is expected to be an active week in the primary market with deals already announced from Surgery Center and Werner Finco. Consensus estimates for this week is north of $25bn.
 

Wednesday, June 14, 2017

Corporate Bond Market

US Equity Futures are up to start the session with the DJ Futures +48 and the S&P Futures +4. The global tone is mixed with European equities trading higher and Asian markets mixed through the overnight. US Treasuries are stronger with yields on the 10yr last at 2.192% and oil is weaker, last quoted $46.06/barrel. Credit is stronger with the Investment Grade Index showing 41.80/43.04 and cash is also tighter.

In credit news, yesterday’s primary market saw $1.8bn priced from domestic issuers and $4.643b total in Investment Grade Credit; June’s tally is up to $50.243bn. From yesterday’s new deals, we are active in: AEL, Apple, GXP and Republic of Chile. Today will be a quiet day in the primary market with the Fed Rate announcement coming this afternoon.

In economic data, there are a few key announcements scheduled for today. First, Mortgage Applications grew 2.8% last week. May’s Consumer Price Index with me announced this morning along with Retail Sales and Business Inventories. Finally, The Fed’s Rate Decision will be announced this afternoon.

Monday, June 12, 2017

Corporate Bond Market

US Equity Futures are down to start the week with the DJ Futures -33 and the S&P Futures -6. The global tone is negative with overseas equities trading lower through the overnight. US Treasuries are a bit weaker with yields on the 10yr last at 2.207% and oil is stronger, last quoted $46.53/barrel. Credit is weaker with the Investment Grade Index showing 43.269/44.60 and cash is also wider.

In credit news, last week’s primary market saw $18.55bn priced in Investment Grade Credit. June’s tally is up to $35.15bn. There is a new deal announced from UniCredit and Korea East-West Power to start the session.

In other credit news, former General Electric CEO Jeffrey Immelt has stepped down and will be replaced by GE’s health-care head, John Flannery. Immelt served 16 years as CEO and was as of recently facing pressure from shareholders as the stock has declined over 12% this year. GE common stock shares are up over 2.5% in the premarket based on this news.

Wednesday, June 7, 2017

Corporate Bond Market

US Equity Futures are mixed to start the day with the DJ Futures -1 and the S&P Futures flat. The global tone is positive with overseas equities trading higher through the overnight. US Treasuries are a bit weaker with yields on the 10yr last at 2.152% and oil is down, last quoted $47.89/barrel. Credit is weaker with the Investment Grade Index showing 43.09/44.42 and cash is tighter.

In credit news, Monday’s primary market saw $5.65bn priced in Investment Grade Credit. June’s tally has crossed $30bn. From yesterday’s new deals, we active in: Union Electric, Harley Davidson, Coach and KeyBank. There is a deal announced from KFW for today’s business.

In economic data, Mortgage Applications grew 7.1% last week.  

Municipal Bond Market

Munis joined Treasuries in finishing stronger on Tuesday as the first of the week’s supply came to market. Yields on both the 10-year and 30-year benchmark muni GO decreased three basis points to 1.83 and 2.66% respectively. Yesterday Siebert Cisneros Shank priced Chicago’s $396.74 million of wastewater transmission revenue bonds in a deal rated A by S&P and AA-minus by Fitch. The $181.14 million of Series 2017A project bonds came to market as 5’s to yield 1.53% in 2020, 3.65% in 2037, and 3.74% in 2047. The Series 2017A project bonds also included a 2042 term bond priced to yield 3.40% with a 5.25% coupon and a 2052 term bond priced to yield 3.91% with a 4.00% coupon. The $215.6 million of Series 2017B refunding bonds were priced as 5’s to yield 1.13% in 2018 and 3.66% in 2038. We also saw the Metropolitan Washington Airports Authority come to market with a $523.785 million deal that was priced as 1’s to yield 0.85% in 2017 and 5’s to yield 3.06% in 2037. Two term bonds were also priced as 5’s to yield 3.12% in 2042 and 3.18% in 2047. This deal was priced by RBC Capital Markets and rated Aa3 by Moody’s and AA-minus by S&P and Fitch. With respect to Puerto Rico, Judge Swain has agreed to rule on the “default” status of the COFINA bonds and even set deadlines for a quick ruling in mid-July.

Tuesday, June 6, 2017

Corporate Bond Market
US Equity Futures are weak to start the session with the DJ Futures -48 and the S&P Futures -6. The global tone is negative with overseas equities trading lower through the overnight. US Treasuries are rallying with yields on the 10yr last at 2.136% and oil is down, last quoted $47.33/barrel. Credit is weaker with the Investment Grade Index showing 43/44.33 and cash is wider.

In credit news, Monday’s primary market saw $7.85bn priced in Investment Grade Credit. June’s tally is at $24.45bn. From yesterday’s new deals, we active in: Air Lease, Autodesk, Atmos Energy, Dr Pepper Snapple, Nokia, National Bank of Canada and San Diego G & E. There is a deal announced from Sempra Energy for today’s business.

In economic data, April’s Job Openings will be reported this morning.

Municipal Bond Market
Munis finished Monday mostly unchanged as traders waited for $7.8 bn of new supply to come to market. The yield on the 10-year benchmark GO was flat from 1.86% on Friday despite yields on the 10-year Treasury rising to 2.18% from 2.16%. Today we will see RBC Capital Markets price the Metropolitan Washington Airports Authority’s $533.79 million of airport system revenue refunding bonds in a deal rated Aa3 by Moody’s and AA-minus by S&P and Fitch. Barclays Capital is also set to price the East Bay Municipal Utility District, Calif.’s $453.84 million of water system revenue green bonds and refunding bonds in a deal rated Aa1 by Moody’s, AAA by S&P, and AA-plus by Fitch. Last but not least, we will see Siebert Cisneros Shank price the city of Chicago’s $399.71 million of project and refunding wastewater transmission revenue bonds in a deal rated A by S&P and AA-minus by Fitch.

Monday, June 5, 2017

Corporate Bond Market

US Equity Futures are down to start the week with the DJ Futures -22 and the S&P Futures -2.75. Overseas equities are mixed through the overnight with majority trading lower. US Treasuries are weaker with yields on the 10yr last at 2.173% and oil is down, last quoted $48.30/barrel. Credit is stronger with the Investment Grade Index showing 42.66/44 and cash is tighter.

In credit news, last week’s primary market saw just short of $30bn priced in Investment Grade Credit. May’s tally reached $181.145bn; $154.095b excluding sovereigns. There was one high yield deal priced in High Yield from Virtu Financial; deal proceeds to finance pending acquisition of KCG Holdings and repay KCG debt. Today is expected to be heavy day in new issuance with new deals announced from: Air Lease, Autodesk, Atmos Energy, San Diego Gas & Electric, National Bank of Canada, TRI Pointe Group, Tenet Healthcare, and GS Caltex.

In economic data, there are a hand full of announcements scheduled for today. First, Nonfarm Productivity was unchanged for Q1 2017. Next, Unit Labor Costs will be reported followed by Markit US Services PMI and Markit US Composite PMI. Also, Labor Market Conditions Index Change will be announced with Factory Orders and Durable/Capital Goods Orders as well.

Thursday, June 1, 2017

Corporate Bond Market
US Equity Futures are mixed to start the month with the DJ Futures -8 and the S&P Futures +1. Overseas equities are mixed through the overnight. US Treasuries are weaker with yields on the 10yr last at 2.227% and oil is up, last quoted $48.43/barrel. Credit is wider with the Investment Grade Index showing 44.08/45.42 and cash is weaker.

In credit news, yesterday’s primary market saw $9.3n priced in Investment Grade Credit. From yesterday’s new deals, we are active in CIT and GS. May’s tally ended at $181.145bn priced in Investment Grade new issuance. There are deals announced from: Caterpillar, Arrow, DBS Group, UBS, and more to follow.

In economic data, May’s ADP Job’s report exceeded expectations with a tally of 253k vs estimates of 180k new jobs.

Municipal Bond Market
Wednesday was a big day for munis as most of this week’s new issue supply came to market. As a result, munis finished the day higher with the yield on the 10-year benchmark G.O. falling three basis points to 1.90%. Morgan Stanley priced Connecticut’s $370 million of state revolving fund general revenue bonds in a deal rated AAA by Moody’s, S&P, and Fitch. The $250 million of green bonds were priced for retail as 3’s to yield 1.02% in 2020 and as 3’s and 4’s to yield 3.08% in a split 2036 maturity. The $120 million of Series 2017B refunding bonds were priced for retail as 5’s to yield 1.16% in 2021 and 1.46% in 2023. We also saw Merrill price the Louisiana Local Government Environmental Facilities and Community Development Authority’s $249.09 million of hospital refunding revenue bonds for the Women’s Hospital Foundation in a deal rated A2 by Moody’s and A by S&P. The $229.12 million of tax-exempts were priced as 3’s to yield 1.74% in 2022, 5’s to yield 3.37% in 2027 and 3.49% in 2044, and as 4’s to yield 3.80% in 2041. The $19.97 million of taxables were priced at par to yield from 2.05% in 2018 to 3% in 2022. Last but not least, we saw Piper Jaffray price the Austin Independent School District’s $219.36 million of building and refunding bonds in a deal which is backed by the Permanent School Fund guarantee program and rated AAA by Moody’s and Fitch. The issue came to market as 5’s to yield 1% in 2019 to 2.82% in 2037.

Wednesday, May 31, 2017

Corporate Bond Market
US Equity Futures are up to start the day with the DJ Futures +25 and the S&P Futures +3.50. The global tone is strong with overseas equities trading higher through the overnight. US Treasuries are weaker with yields on the 10yr last at 2.222% and oil is down, last quoted $48.37/barrel. Credit is tighter with the Investment Grade Index showing 43.71/45.16 and cash is wider.

In credit news, Tuesday’s primary market saw $3.175bn priced in Investment Grade Credit. From yesterday’s new deals, we are active in First Republic. Hertz is expected to bring $1bn deal today to conclude the month.  

In economic data, Mortgage Applications fell 3.4%. April’s change in monthly Pending Home Sales will be reported this morning followed by the Fed Reserve’s Beige Book this afternoon.

Municipal Bond Market
Munis finished stronger yesterday as traders waited for the bigger deals to come to market this week. The yield on the 10-year benchmark muni dropped two basis points to 1.93% bringing the 10-year muni Treasury ratio up to 87.2%. The municipal supply is expected to be $4.83 bn for the current week with $3.28 billion being negotiated deals and $1.55 billion being competitive. So far this week we saw Citi price the Houston Independent School District’s $149.955 million of variable rate limited tax schoolhouse bonds in a deal backed by the Permanent School Fund Guarantee Program and rated AAA by Moody’s and S&P. The deal came to market as a bullet maturity in 2039 to yield 1.17% with a 3% coupon and a tender date of July 1, 2019 with a 7.00% step rate. The largest deals in the primary market are scheduled for today and Thursday. On Thursday JPMorgan is set to price the Duke University Health System Inc.’s $600 million of taxable bonds in a deal rated Aa2 by Moody’s and AA by S&P and Fitch. We will also see Morgan Stanley price Connecticut’s $370 million of state revolving fund general revenue bonds in a deal rated AAA by Moody’s, S&P, and Fitch. Barclays Capital will price the Connecticut Health and Educational Facilities Authority’s $250 million of revenue bonds for Yale University in a deal rated AAA by Moody’s and S&P. Lastly, Merrill is set to price the Louisiana Local Government Environmental Facilities and Community Development Authority’s $250.885 million of Women’s Hospital Foundation Project refunding revenue bonds in a deal featuring both taxable and tax-exempts. This deal is rated A2 by Moody’s and A by S&P and is also scheduled for Thursday.

Tuesday, May 30, 2017

Corporate Bond Market
US Equity Futures are down to start the session with the DJ Futures -36 and the S&P Futures -4.50. Overseas equities are mixed through the overnight with European and Asian markets mostly trading lower. US Treasuries are stronger with yields on the 10 yr last at 2.236% and oil is down, last quoted $49.51/barrel. Credit is wider with the Investment Grade Index showing 44.92/46.46 and cash is also weaker.

In credit news, last week’s primary market saw $48.775bn priced in Investment Grade Credit. For the first time in history, new issuance has marked the 4th straight consecutive $30bn+ week. May’s tally is up to $168.67bn. In High Yield, May has accounted for the busiest month in new issue since March. Today is expected to be a light day in new issuance to end the month with summer approaching.

In economic data, Personal Income statistics will be reported for April.

Municipal Bond Market
The municipal supply is expected to be $4.83 bn for the short week ahead with $3.28 billion being negotiated deals and $1.55 billion being competitive. Thursday will be the big day for deals this week. On Thursday JPMorgan is set to price the Duke University Health System Inc.’s $600 million of taxable bonds in a deal rated Aa2 by Moody’s and AA by S&P and Fitch. We will also see Morgan Stanley price Connecticut’s $370 million of state revolving fund general revenue bonds in a deal rated AAA by Moody’s, S&P, and Fitch. Last but not least, Merrill is set to price the Louisiana Local Government Environmental Facilities and Community Development Authority’s $250.885 million of Women’s Hospital Foundation Project refunding revenue bonds in a deal featuring both taxable and tax-exempts. This deal is rated A2 by Moody’s and A by S&P and is also scheduled for Thursday.

Thursday, May 25, 2017

Corporate Bond Market

US Equity Futures are up to start the session with the DJ Futures +67 and the S&P Futures +6. Overseas equities are mixed through the overnight with European and Asian markets mixed. US Treasuries are stronger with yields on the 10 yr last at 2.247% and oil is down, last quoted $50.71/barrel. Credit is tighter with the Investment Grade Index showing 44.25/45.81 and cash is also stronger.

In credit news, Wednesday’s primary market saw $8.25bn priced from 4 issuers in Investment Grade Credit. This brings the monthly tally to $48.425bn. From yesterday’s new deals, we are active in Home Depot. Today is expected to be another light day in new issuance with the holiday weekend approaching.

In economic data, Wholesale Inventories and Jobless Claims will be announced this morning.  

Wednesday, May 17, 2017

Corporate Bond Market

US Equity Futures are weaker to start the day with the DJ Futures -85 and the S&P Futures -10. Overseas equities are mixed through the overnight with Europe trading lower and Asian markets mixed. US Treasuries are stronger with yields on the 10 yr last at 2.287% and oil is up, last quoted $48.91/barrel. Credit is wider with the Investment Grade Index showing 44.23/45.66 and cash is also weaker.

In credit news, Tuesday’s primary market saw $10.95b priced from 6 issuers in Investment Grade Credit bringing the monthly tally to $103.045b. From yesterday’s new deals, we are active in PNC and Morgan Stanley.

In economic data, Mortgage Applications dropped 4.1% last week.

Municipal Bond Market

Munis finished stronger yesterday as the yield on the 10-year benchmark muni general obligation fell two basis points to 2.09%. The Los Angeles Unified School District’s $1.08 billion of refunding bonds was priced for institutions on Tuesday in a deal rated Aa2 by Moody’s and AAA by Fitch. Morgan Stanley priced the School District’s dedicated unlimited ad valorem property tax general obligation refunding bonds as 5’s to yield 0.74% in 2017, 0.83% in 2018, 0.96% in 2019, as 4’s to yield 1.25% in 2021, and 4’s and 5’s to yield 2.28% in a split 2027 maturity. Yesterday we also saw Wells Fargo price the NY Dorm Authority’s $680.95 million of tax-exempt and taxable revenue bonds for New York University. The deal, which is rated Aa2 by Moody’s and AA-minus by S&P, came in two parts. $452.97 million of Series 2017A tax-exempts were priced as 4’s to yield from 0.97% in 2019, 5’s to yield 3.15% in 2040 and 3.17% in 2043. $227.98 million of Series 2017B taxables were priced to yield 1.599% in 2019, 3.729% in 2032, 3.779% in 2034, 3.998% in 2039 and 4.148% in 2047. Tomorrow we will see a deal from Sibert Cisneros Shank involving the District of Columbia’s $576 million of Series 2017A GOs.

 

Monday, May 15, 2017

Corporate Bond Market

US Equity Futures are up to start the session with the DJ Futures +41 and the S&P Futures +3. Overseas equity markets are mixed through the overnight with European and Asian markets mixed. US Treasuries are down with yields on the 10 yr last at 2.334% and oil is up, last quoted $49.29/barrel. Credit is wider with the Investment Grade Index showing 44.68/45.11 and cash is stronger.

In credit news, last week’s primary market saw $39.17bn priced in Investment Grade Credit. YTD volume Today is expected to be a busy day in the primary market with deals already announced from: HSBC, Wells Fargo, Australia & New Zealand Banking Group, BPCE, and Cheniere Energy with more to come.

In economic data, May’s Empire Manufacturing will be reported this morning followed by NAHB Housing Market Index and Foreign Net Transactions.

Municipal Bond Market

Munis will see another big week in issuance as $7.17 bn of negotiated deals and $1.62 bn of competitive sales are expected to hit the market. Morgan Stanley is set to price $1.08 bn in GO refunding and ad valorem property tax bonds for the Los Angeles Unified School District on Tuesday. The deal, which is rated Aa2 by Moody’s and AAA by Fitch, will be the largest of the week. Wells Fargo is expected to price $665 million of NY Dorm Authority revenue tax-exempt and taxable bonds for NYU on Tuesday. This deal, which is ratedAa2 by Moody’s and AA- by S&P, will come to market as Series A tax-exempt bonds maturing from 2019-2038 including a term bond in 2043 and Series B taxable bonds maturing in 2019 through 2032 including terms in 2039 and 2047. Last but not least, Siebert Cisneros Shank & Co will price $576.415 million of GO refunding bonds on Wednesday for the District of Columbia in a deal that is rated Aa1 by Moody’s and AA by S&P and Fitch and expected to mature from 2019 through 2037.

Tuesday, May 9, 2017

Corporate Bond Market
US Equity Futures are up to start the session with the DJ Futures +35 and the S&P Futures +3. Overseas equity markets are mostly stronger through the overnight with the exception of China. US Treasuries are down with yields on the 10 yr last at 2.4% and oil is weaker, last quoted $46.19/barrel. Credit is tighter with the Investment Grade Index showing 44.25/45.68 and cash is stronger.

In credit news, Monday’s primary market saw $13.3bn priced in Investment Grade Credit with Intel leading the charge. From yesterday’s new issuance, we are active in Intel, Amgen, PPL Energy and Appalachian Power. Today is expected to be a busy day in the primary market with deals already announced from: Bank of NY, Capital One, CK Hutchinson, Costco, Hexion, Community Health, Springleaf Finance, Resolute Energy, Entergy Arkansas, and Enjoy S.A.

In economic data, monthly change in wholesale inventories will be reported this morning.

Municipal Bond Market
Despite Treasuries being weaker on Monday, the yield on the 10-year benchmark muni GO was flat from 2.17% on Friday. No big deals came to market yesterday. Traders are waiting for Cuyahoga County, Ohio, and the state of Hawaii to price for retail investors today and institutions on Wednesday. Today we will see deals from Houston Independent School District and San Francisco Bay Area Rapid Transit District. Citigroup is pricing $838 million of limited tax schoolhouse and refunding bonds for the Houston Independent School District in Texas for retail today and for institutions tomorrow. Likewise, Barclays Capital is set to price $388.85 million of GO bonds for the San Francisco Bay Area Rapid Transit District. Both deals are rated AAA by Moody’s and S&P.

Monday, May 8, 2017

Corporate Bond Market

US Equity Futures are down to start the week with the DJ Futures -14 and the S&P Futures -1.25. Overseas equity markets are mixed through the overnight. US Treasuries are stronger with yields on the 10 yr last at 2.336% and oil is weaker, last quoted $46.08/barrel. Credit is tighter with the Investment Grade Index showing 44.45/45.89 and cash is weaker.

In credit news, last week’s primary market saw $39.425bn priced in Investment Grade Credit with domestic corps leading the charge. We are active in Eli Lilly, Northern Trust and Teachers Insurance. This week is expected to be another busy week in the new issue market with analysts’ consensus calling for at least $25bn. There are deals announced from Century Communities, CareTrust REIT and Woori Bank for today’s business.

Municipal Bond Market

Muni market volume is expected to rise to $9.36bn with $7.82bn being negotiated deals and $1.54 billion being competitive sales. This surge in volume will bring us to a 9-week high. Merrill is set to price bonds on Wednesday for the County of Cuyahoga, Ohio, and the State of Hawaii which are the two largest deals of the week. The Cuyahoga deal, which is rated Baa3 by Moody’s and BBB- by S&P and Fitch, includes $915 million of revenue bonds for the Metrohealth System Hospital. The second deal is the State of Hawaii’s $856 million GO bonds which are rated Aa1 by Moody’s, AA+ by S&P, and AA by Fitch.

Tuesday, May 2, 2017

Corporate Bond Market

US Equity Futures are down to start the day with the DJ Futures -18 and the S&P Futures -1.75. Overseas equity markets are mixed with European equities mostly stronger and Asian markets mixed. US Treasuries are weaker with yields on the 10 yr at 2.331% and oil is stronger, last quoted $49.17/barrel. Credit is tighter with the Investment Grade Index showing 45.679/47.107 and cash is also stronger.

In credit news, yesterday was light in Investment Grade new issuance pricing just $4.35bn from 2 issuers. We are active in both, Kimberly Clark and Unitec Technologies from yesterday. Today is expected to be a heavy day in the primary market ahead of tomorrow’s FOMC Rate Decisions.

Municipal Bond Market

Yesterday was very quiet in the muni market. Munis finished the day weaker as yields on the benchmark 10-year rose to 2.183%. Traders anticipate $7.02bn of new issuance this week including negotiated deals from University of California Regent ($1.1bn), Kentucky Economic Development Finance Authority ($454.815 million), Owensboro Health ($495.3 million), and the state of Wisconsin ($688.31 million). We will also see competitive deals from Minneapolis ($80 million), City of Lawrence, Kansas ($20.5 million), and the Virginia Public School Authority ($17.9 million). Collectively, municipalities plan to sell up to $14.7bn of bonds in the next month. In other news, the stay on litigation that protected Puerto Rico from lawsuits expired today. Bondholders have already filed lawsuits against Puerto Rico as they try to recoup millions of dollars invested in PR bonds. If and when Puerto Rico announces a bankruptcy-like procedure to restructure its $70bn in debt, it will be the largest US municipal bankruptcy ever.

 

Monday, May 1, 2017

Corporate Bond Market

US Equity Futures are up to start the day with the S&P Futures +29 and the DJ Futures +4.50. Overseas equity markets are mixed with European and Asian equities both mixed. US Treasuries are weaker with yields on the 10 yr at 2.296% and oil is weaker, last quoted $49.07/barrel. Credit is weaker with the Investment Grade Index showing 46.06/47.48 and cash is stronger.

In credit news, April’s primary market saw $28.9bn priced in Investment Grade credit bringing YTD tally to $615.575. High Yield has priced just over $97bn this year. This week is expected to bring at least $25bn in Investment Grade new issuance this week. Issuers will most likely front load this week’s deals ahead of Wednesday’s FOMC rate decision. There are deals announced from United Technologies and The New Home Co.

On the earnings front, DISH and Cardinal Health both reported numbers that beat analysts’ estimates for Q1.

In economic data, there are a few announcements scheduled for today. First, Personal Income & Spending will be reported followed by ISM Manufacturing and Construction Spending.

Municipal Bond Market

This week’s new issue calendar is just north of $7bn and is composed of $5.96 billion of negotiated deals and $1.06 billion of competitive sales. Jefferies is set to price $1.13bn of University of California Regent’s bonds on Thursday. The deal, which is rated Aa2 by Moody’s and AA by S&P and Fitch, is expected to be split into $447.83 million of tax-exempt bonds, $500 million of taxable fixed rate notes, and $186.225 million of taxable bonds. The state of Wisconsin is also scheduled to price a combined $688.31 million in bonds for on Tuesday. The deal, which is rated Aa3 by Moody’s and AA- by S&P and Fitch, will see $403.105 million of general fund annual appropriation refunding taxable bonds maturing from 2018 through 2027. While Wells Fargo will price the $403.105 million in bonds, JP Morgan will price the other $285.205 million in transportation revenue bonds which is rated Aa2 by Moody’s and AA+ by S&P and Fitch. In other news, Puerto Rico was happy to learn on Sunday that they will receive $295 million in Medicaid after Congress finally reached a deal on funding the government through September.