Tuesday, May 12, 2015

Municipal Bond Market
Munis are weaker again this morning after yesterday’s sell off.  Volume was extremely light with very few items out for the bid.  We continue to see dealers reluctant to cut prices and take losses.  Today’s focus should be on new issue taking even more attention away from stale secondary offerings.  The highlights of today’s calendar include $300m NC ST GOs and $45mln NJ Environmentals.  30-day supply is unchanged this morning with $14.71bln on tap compared to about $14.5bln yesterday.

PR benchmarks GOs were unchanged yesterday after rallying throughout last week. 5000m traded @ 79.125 (10.51%) after trading as low as $77 two weeks ago. As of this morning we are seeing a $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: $ 14.7bln