Wednesday, Apr. 8, 2015

Municipal Bond Market
Munis are unchanged this morning after trading weaker yesterday.  We continue to see extremely light volume in the secondary market with very few offerings and bid-wanted situations actually trading. Today’s new issue calendar is comprised mostly of smaller deals with $225mln NC St as the highlight.   30-day supply is slightly lighter with $11.12bln scheduled versus $11.6bln yesterday. 

In credit news, Rahm Emanuel won a second term as Mayor of Chicago which should bring some clarity to the future of the city.  Emanuel endorsed broadening sales taxes and constructing a casino where revenue would be dedicated towards pension obligations.  The city currently has $20bln in unfunded pension liabilities, $600mln of which is due next year.  Chicago debt was unchanged on the news.

PR benchmarks GOs were unchanged again on extremely light volume. Bonds 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 @ $81.50 (10.17%).  PREPA debt continues to trade in the high $50’s after news that PREPA will receive a $2bln cash infusion.

30 Day visible supply: $ 11.12bln

Deals we are bidding:
38mln     Benton, AR School Dsitrict #6     2016-2023     Aa2/
38mln     Howard County, MD G.O. Refunding     2016-2045     Aaa/AAA
198mln     Howard County, MD Public Improvement Refunding     2016-2035     Aaa/AAA
21mln     Kenosha County, WI G.O. refunding     2016-2030
31mln     Knoxville, TN Electric System Revs     2015-2029     Aa2/AA
137mln     Knoxville, TN Wastewater System Refunding     2016-2040     Aa2/AA-
225mln     North Carolina State G.O.s     2016-2035     Aaa/AAA