Monday, Jan. 5, 2015

Corporate Bond Market
This morning starts 2015 with a slightly weaker tone, DJI fut -35, S&P fut -4.5, Euro -37, while the 10yr yield is down at 2.114%. The Euro region faces a possible shake up as Greece prepares for elections this month that will be deciding the fate of the country's Euro membership. Angela Merkel considers a Greek exit from the Euro to be managable. German inflation slowing should also bolster the case for the ECB to begin bond purchases sooner than later.

Friday marked a very slow start to the new year for the credit market with limited if not non-existent secondary flow. Oil prices will remain the near term focus for investors. Embattled Cliffs Natural Resources (CLF) if opening up a touch on news of another asset sale. Elsewhere in the sector, BP is under a bit of pressure following losses from their Rosneft stake, and Glencore has announced it will restart coal mining operations in Australia.

Corporate new issuance is expected to ramp back up following the holidays, 2014 ending with $1.395t in the IG space. Hearing expectations of $30-35bln due this week but no names announced yet. Economic data quiet today however will pick up tomorrow through the end of the week.


Municipal Bond Market
Muni new issuance looks light this week to kick off the New Year. There is about $4.3bln in new debt scheduled to be priced. We should see strong demand for new deals with buyers still sitting on huge amounts of cash from inflows prior to the holidays. The week's light calendar should also bring some attention to the secondary.

Volume in in PR GO 8s was light during the shortened holiday week. Benchmark GOs traded in a wider range than usual with trades of 5mln+ occurring anywhere from $85.75-$87.75.

30 Day visible supply: $7.51bln

New Issue:
Negotiated: $3.3B
Competitive: $1B
Total: $4.3bln

$412mln Oregon Dept of Admin Services 2016-2035 Aa2/AAA
$273mln Broward County, FL 2016-2030 A1/A
$198mln Texas A&M 2015-2044 Aaa/AA+