Tuesday, Apr. 14, 2015

Municipal Bond Market
Munis are unchanged this morning after a quiet start to the week.  Secondary volume was extremely light again with the majority of buyers sitting on the side lines ahead of this week’s new issue. Today kicks off the retail order period for this week’s largest deal ($775mln Port Authority of NY & NJ) along with the pricing of numerous smaller deals.  We expect to see light volume in the secondary yet again as buyers jump into the bulk of this week’s primary.  We could see some selling this morning as buyers raise cash ahead to put to work in the primary.  30-day supply jumped to $13.25bln from about $11.5bln yesterday.

PR benchmarks GOs remained unchanged to start the week. GOs continue to trade in the low $80.00s (10.10%) after trading as high as $86.625 (9.56%) in mid-March. 5000m+ bonds traded yesterday @ $81.25 (10.20%).  We should see benchmark GOs remain in this range until we get more clarity on the pricing of the new deal.

In credit news, PREPA’s chief restructuring officer will testify before a Puerto Rico Senate committee this morning.  The testimony comes as we approach the expiration of the extended forbearance agreement on Wednesday.  We expect the agreement to be extended yet again as the market awaits PREPA’s plan.

30-Day visible supply: $ 13.25bln

Deals we will be bidding today:
250,000     Boulder Valley School District, CA     2016-2044     Aa1/AAA
65,000     Hamilton County, TN Sr. 2015A     2016-2030     Aaa/AAA
26,285     Hamilton County, TN Sr. 2015B     2016-2040     Aaa/AAA
87,090     Metropolitan Atlanta Rapid transit. GA     2041-2045     /AA+
5,850     Northeast, WI Technical College District     2015-2019     Aa1/
69,400     Sumner County, TN     2015-2035     /AA+