Friday, Feb. 20, 2015

Corporate Bond Market Comment
European equities are mixed as further talks with Greece are set to resume.  Stateside, stocks are mixed with DJ Fut +6  and S&P Fut -.50 to start.  Oil is set to end the week down with US Crude Inventory numbers coming in at high levels.  Oil last at $51.46.  The US Treasury market is rallying to start the day bringing the 10yr to a 2.08% yield last.  Credit markets are unchanged to slightly tighter after having a firm tone all week.  The IG Index is unchanged at 64/64.5. Lipper is reporting inflows into Investment Grade Corporate Bonds of $2.985bn,  and inflows into High Yield of $1.642bn which is no doubt supporting the better buying we've seen of late.

In terms of market-moving credit news, there is really not much on the tape.  Newmont Mining reported good results with a significant beat (.17 v. .12 expected) and should drive NEM and the rest of the sector tighter.  There was a decent amount of primary activity yesterday with deals: Bank of New York (5yr and 10yr) and regional bank issuer Huntington Bank (3yr and 5yr).  Both were well received by the market.  On the High Yield side, Sprint priced a 7.625%  2025 deal at par.  The deal traded right around issue into the close.  Today should be quiet on the new issue front and no significant economic data to speak of.


Municipal Bond Market Comment
Munis were unchanged yesterday with another quiet trading day.  We continue to see extremely weak volume in the secondary, with huge amounts of BWs and very little items actually trading.  Muni funds saw their weakest fund flows of the year with $59mln in inflows versus $460.3mln the week earlier.

In credit news, PR GOs & COFINA debt was downgraded by Moodys late Thursday.  GO debt was downgraded to Caa1 from B2, while COFINA was cut to B3 from Baa3.  Bonds were unchanged as of late trading on Thursday.

PR Benchmark GOs have not traded since the Moodys downgrade.  5mm+ bonds traded earlier in the day @ $82.875(9.98%), which is where we have seen bonds trade for most of the week. 

30 Day visible supply: $12.7bln

New Issue: no notable deals for today.

UST 10yr 2.110%


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