Tuesday, May 5, 2015

Municipal Bond Market
Munis are stronger this morning after a weak day of trading yesterday.  We continue to see extremely light volumes on Mondays which was evident yesterday.   The focus today will be on the primary with the pricing of $300mln Ohio ST GOs and $150mln Princeton Universities.  Funds have seen inflows for the second straight week leaving a decent amount of cash on the sidelines after such a light calendar last week.  New Cash should support most of the week’s primary deal with any left over money flowing into the secondary.  30-day supply remains mostly unchanged this morning to with $12.9bln scheduled compared to $13.00bln to start the week.

PR benchmarks GOs continue to firm up after selling off significantly after legislators rejected an overhaul of PRs tax system last week. Bonds traded around $78.50 (10.60%) 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: $12.96bln

Deals we will be bidding today:
150,000     NJ Ed Fac Auth, Princeton U     2017-2045     Aaa/AAA
21,330     Annapolis, MD Series B     2016-2028     Aa2/AA+
1,630     Canby, MN G.O. Taxable     2017-2036     /AA+
64,385     Clemson, SC Athletic Facilities Rev     2016-2045     Aa3/
97,430     Clemson, SC Higher Ed Facilities Rev     2018-2045     Aa2/AA-
13,485     Ellwsorth, ME Series A     2015-2039     Aa3/
30,000     Massachusetts School Building Authority     2016-2045     Aa2/AA+
300,000     Ohio State G.O.s Series B     2016-2035     Aa1/AA+