Friday, Mar. 27, 2015

Corporate Bond Market
Global equities were mixed overnight,  Euro Stoxx +.34%,  Nikkei -.95%,  Hang Seng -.04%.   It appears that the ECB will have no trouble meeting its bond buying goals, reinforcing the stronger tone in equities there.  Stateside equity futures are down slightly with the DJIA Fut -18 and the S&P Fut -1.25.  Oil is hovering around $50.61,  and 10yr treasuries were last at 1.984% ahead of the 8:30 economic GDP data.  Credit is unchanged to start with the IG index at 64/64.5.  Lipper is reporting Net Inflows of $1.21bn into Corp-IG funds, and Net Outflows of $0.856bn from High Yield Funds.

In credit news, Cliffs Natural Resources CEO - Goncalves, was on the tape yesterday stating the company  had sufficient liquidity through 2016.  They remain focused on their 2018 issue as they is the next maturity.  These statements come on the heels of their successful $540mm 2020 new issue and subsequent boost to secondary pricing.  The 2018's were slightly higher on the release.  Elsewhere Amazon is in talks to acquire Net-a-Porter, valued at approximately Euro2bn.

On the new issue front, the main event was an AT1 deal from Standard Chartered.  They priced a 6.5%  Perp non-call 5yr deal at par.  They traded up about a point in secondary action.  MTD we are at $132bn with four days to go. Syndicate estimates for April coming in at $70bn.   On the economic data front: GDP Annualized QoQ (8:30am), Personal Consumption (8:30am), GDP Price Index (8:30am), Core PCE QoQ (8:30am), U of Mich Sentiment (10:00am) are due to be released today.


Municipal Bond Market
Munis are unchanged this morning after trading weaker yesterday.  Attention will be on the secondary today with new issue finished up for the week.  The new CA Tobacco deal finalized pricing yesterday and came to market about 10bps stronger than anticipated.  The deal was met with huge demand across all maturities.  30 day supply jumped to about $11.9bln from $8.37bln yesterday. 

Muni funds saw inflows of $541mln, the largest amount of new cash since feb 4th.  We continue to see new cash put to work in the primary market and should see new money help support the $4bln jump in 30 day supply. 

PR benchmarks GOs were unchanged on the day on light volume. Bonds continue to trade around $82.00 (10.10%) after trading as high as $86.625 (9.56%) last week. 

30 Day visible supply: $ 11.9bln


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