Tuesday, Apr. 21, 2015

Municipal Bond Market
Munis are slightly stronger this morning after a quiet start to the week.  Secondary flow was extremely light as buyers await the weeks $8.7bln in new issuance.  The highlight of today’s primary will be the pricing of $300mln Chicago BOEs.  The name has faced a substantial amount of headline risk over the past month.  BOE 5’s of 2042 traded as low as 4.70% in December and have now widened to around a 5.50%.  We should see strong demand from investors with this being one of yieldiest deals over the past month.  30-day supply is unchanged this morning with 11.8bln scheduled over the next 30 days.

PR benchmark GOs remained unchanged on average volume. GOs continue to trade in the low $80.00s (10.34%) after trading as high as $86.625 (9.56%) in mid-March. Yesterday’s largest trade in the name was 2000m bonds @ $79.88 (10.44%) We expect trading in PR GOs to remain very quiet until we get more clarity on the pricing of a new deal or a break through with PREPA.

30 Day visible supply: $11.8bln

Deals we will be bidding:
2,059     Union Beach, NJ (Monmouth County)     2016-2030     /AA-
34,675     Hampton Bay, NY School District     2015-2031     A2/
105,355     California State G.O. *Taxable* Group A     2020     Aa3/A+
403,500     California State G.O. Tax Exempt Refunding Group B     2015-2024     Aa3/A+
592,700     California State G.O. T/E  Group C     2015-2035     Aa3/A+
54,500     Dane County, NC     2016-2032     Aa2/AA
26,285     Hamilton County, TN Refunding     2016-2024     Aaa/AAA
65,000     Hamilton County, TN New Money     2016-2030     Aaa/AAA