Thursday, May 14, 2015

Municipal Bond Market
Munis are stronger this morning after mixed trading yesterday.  Volume was extremely light yet again with barely any items trading off bids wanted.  Attention was mostly on Chicago yesterday after being downgraded to junk by Moodys.  We saw extremely sloppy trading in odd lot Chicago paper with very few blocks actually trading.  New issue is on the lighter side today with $140mln Santa Clare USD and $137mln Milwaukee GOs highlighting the calendar. 30-day supply is slightly weaker this morning with $11.75bln on tap compared to about $13.5bln yesterday.

PR benchmarks GOs were unchanged yesterday and continue to stabilize in the high $70s. Bonds continue to trade around 79.00 (10.53%) after trading as low as $77 two weeks ago. We continue to see pressure on corporation debt as we head into July with PREPAS upcoming interest principal payments and a potential tax overhaul.

30-Day visible supply: $13.58bln