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