Wednesday, Apr. 22, 2015

Municipal Bond Market
Munis are unchanged this morning after trading slightly weaker yesterday. Secondary flow was extremely light as buyers focused on the primary with the pricing of some of the week’s larger deals.  30-day dropped to $9.5bln from about $11.5bln over the past two days.

The state of California came to market with $1.1bln in GOs which were met with extremely strong demand and the Chicago BOE was able to price $300mln in GOs after a three week delay.  The BOE deal was oversubscribed with the 5.25’s of 2039 priced at a 5.63ytm and has been one few sources of yield in the primary market over the past month.   The focus should be on the secondary today with mostly micro deals on tap for the day.

PR benchmark GOs remained unchanged on average volume. GOs continue to trade in the high $70.00s (10.40) to 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 5000m bonds @ $79.875 (10.401%) 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:
$20,405     Dover, NH G.O.s     2017-2027     /AA+
$17,050     Mount Vernon School District, NY     2015-2027     /A
$6,200     Milford, MA G.O.s     2016-2045     Aa2/
$22,625     Powhatan County Economic Dev Auth Refunding     2015-2031     Aa3/AA
$6,085     Scarborough, ME     2015-2034     /AA