Monday, May 4, 2015

Municipal Bond Market
Munis were weaker yet again heading into the weekend.  Secondary flow was extremely light Friday with very items out for the bid and very few transactions.   New issue looks to bounce back this week with around $9bln on tap compared to $4.5bln last week.  This week’s calendar is comprised of multiple mid-sized deals.  Highlights include $310mln LA Community College District, $279mln Mid Bay Bridge Authority, and $277mln Lee Memorial Health.  30 day supply jumped this morning to $13.04bln compared to $12.00bln on Friday.

Muni funds recorded a second straight week of inflows with $481.3mln in new cash.  We have seen decent inflow numbers over the past two weeks after three straight weeks of out flow.  We continue to see huge demand for both new issue and hy paper as buyers have cash to put to work.

PR benchmarks GOs stabilized Friday after selling off significantly after legislators rejected an overhaul of PRs tax system. Bonds traded around $78.50 (10.60%) versus trading as low $77 (10.825%) on Thursday.  We expect GO debt to be extremely sensitive to any news relating a new deal over the next few weeks.

30 Day visible supply: $ 13.04bln

Deals we will be bidding today:
42,696     Albuquerque, NM G.O.s     2016-2027     Aa1
5,000     Carver, MN G.O. Refunding Series B     2017-2029     /AA-
1,220     Carver, MN G.O. Refunding Series A New Money     2017-2031     /AA-
2,650     Clearwater, MN G.O.s Series A     2016-2035     /AA
7,175     Savage, MN G.O.s Series 2015A     2017-2022     /AA+