Monday, May 11, 2015

Municipal Bond Market
Munis are slightly weaker this morning after trading stronger into the weekend.  New issue will hit $8.4bln this week with about $7bln in negotiated deals and $1.4bln in competitive.  The highlights of this week’s calendar include $833mln Salt River Agriculture Improvement bonds, $500mln CT GOs, and $495mln PA Turnpikes.  We could see some weakness in the primary this week as muni funds unexpectedly reported $211mln in outflows.  Inflow money has supported the primary over the first few months of the year.   30-day supply is stronger this morning with $14.31bln on tap compared to $12.9bln.

PR benchmarks GOs were unchanged yesterday after rallying throughout the week. 5000m traded @ 79.00 (10.53%) after trading as low as $77 two weeks ago. As of this morning we are seeing an $78.625 bid on benchmark GOs. We expect GO debt to be extremely sensitive to any news coming out of the island over the next few weeks, specifically any news regarding a new deal. 

30-Day visible supply: $ 14.3bln