Wednesday, Apr. 15, 2015

Municipal Bond Market
Munis are slightly weaker this morning after another quiet trading day.  Secondary flow was nonexistent again with the majority of buyers participating in the primary market. The retail order period began for the pricing of $775mln in debt from the Port Authority of NY & NJ.  The deal was met with strong demand, bonds being priced from .51%  in 2017 to a 3.42% in 2033. Chicago BOEs traded significantly weaker heading into the close.  3295m 5s of 2041 traded @ 93.179 (5.49%) after trading as around par in early march.  There was no news out on the name, however, we have seen large block selling over the past week as funds continue to dump the name. We expect to see the same trend today of light secondary volume as buyers continue to focus on the new issue market.  30-day supply declined to $11.42 from about $13.5bln yesterday.
 PR benchmarks GOs remained unchanged on Tuesday. 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 @ $81.125 (10.22%).  We should see benchmark GOs remain in this range until we get more clarity on the pricing of the new deal.  

30 Day visible supply: $ 11.42bln

Deals we will be bidding today:
61,710     Alpine School District, UT     2018-2023     Aaa/
65,485     Virginia G.O.s     2016-2035     Aaa/AAA
214,980     Virginia G.O.s Refunding     2018-2027     Aaa/AAA