Wednesday, May 6, 2015

Municipal Bond Market
Munis are weaker again this morning as the market continues to chase Treasuries.  We continue to see extremely light volumes in the secondary with few bidders and many items not trading.   The focus today will be on the primary with the pricing of $334mln LA GOs.   This should be one of the more interesting deals of the week as the state has been in the news recently over a variety of budget issues.  We expect buyers to look for some sort of concession to get the deal priced.  30-day supply is slightly weaker this morning with $11.26bln on compared to $12.9bln yesterday.

PR benchmarks GOs continue to firm up after selling off significantly due to legislators rejecting an overhaul of PRs tax system last week.  Bonds traded slightly higher yet again with 5mm trading as high as $79 (10.52%) versus trading as low $77 (10.825%) on Thursday of last week.  We expect GO debt to be extremely sensitive to any news relating a new deal over the next few weeks.    

30-Day visible supply: $11.26bln

Deals we will be bidding today:
13,720     Berlin, CT G.O.s     2016-2034     /AA+
17,950     Bethlehem, NY Central School District     2015-2034     /AA
329,565     Los Angeles Union School District, CA     2015-2025     Aa2/AA-
334,990     Louisiana State G.O.s     2016-2035     Aa2/AA
82,840     Marin County, CA G.O.s     2015-2045     Aa2/AA+
166,335     Seattle, WA Series A     2015-2035     Aa1/AAA
156,875     Seattle, WA Series B     2016-2044     Aa1/AAA
17,120     Sevierville, TN G.O. Refunding     2016-2035     Aa3/