Thursday, Apr. 23, 2015

Municipal Bond Market
Munis are stronger this morning after trading weaker throughout the curve yesterday. Secondary flow was extremely light as buyers continue to focus on the primary market.  Chicago BOE bonds traded up in the secondary after seeing huge demand during the order period.  The 5.25s of 2039 priced at a 5.63ytm and are being offered as high a 5.53ytm this morning.  New issue is light today, which could lead to some additional flow in the secondary with the first half of the week being completely dominated by new issuance.  30-day dropped to $8.2bln from about $9.5bln yesterday.

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 3000m bonds @ $80.25 (10.348%).  We continue to see nontraditional muni buyers stepping into PR debt.  Yesterday, DoubleLine capital reported a $20mln position in its income solution fund.

30 Day visible supply: $ 8.2bln

Deals we will be bidding:
$43,105     Clover School District No. 2, NC     2017-2030     Aa2/
$30,000     Iowa Brd of Regents (IA St U of Science & Technology)     2016-2035     Aa3/
$26,005     North Dakota Public Fin Auth     2016-2035     /AA
$302,125     North Texas   Municipal Water District     2015-2044     Aa2/AAA