Municipal Bond Market
Munis are unchanged this morning after an extremely quiet start to the week. We expected to see an uptick in flow in the secondary with such a light new issue calendar this week, however, demand was minimal at best. Attention should be split between the secondary and primary today with one of the larger days of new issuance for the week. The highlight of today’s calendar will be the pricing of $218mln Humble TX bonds. 30-day supply jumped to $8.7bln from $7.5bln yesterday.
PR benchmarks GOs were unchanged again. GOs continue to trade in the high $70.00s (10.40) to low $80.00s (10.34%) after trading as high as $86.625 (9.56%) in mid-March. Yesterday’s largest trade in the name was 5000m bonds @ $80.125 (10.336%).
In credit news, PREPA was downgraded by S&P Friday to CCC- from CCC. S&P cited repeated draws on debt service for the downgrade. We should see very little impact on PREPA debt post downgrade. At this point, the market is focused on both the extension with creditors and the July bond payments.
30-Day visible supply: $8.7bln
Deals we will be bidding today:
218,695 Humble, YX Independent School District Bonds *PSF* 2016-2039 Aaa/AAA
28,945 Humble, YX Independent School District Bonds 2016-2030 Aa1/AA-
56,835 Palm Beach County, FL 2016-2035 Aa1/AA+
41,000 Rutherford, TN G.O.s New Money 2016-2035 Aa1/AA+
26,100 Rutherford, TN G.O.s Refunding 2016-2028 Aa1/AA+