Wednesday, Jun. 10, 2015

Municipal Bond Market
Munis are weaker again this morning for the second straight day.  Attention was on the primary yesterday with the pricing of the week’s largest deal, $1.3bln GA GOs.  The deal was met with strong demand across all maturities (GA GO 3.50s of 2035 priced at a 3.58%).  We continue to see extremely light demand in the secondary as the majority of the market sits on losses from deals priced over past few weeks.  30-day supply is lighter this morning with $10.7bln scheduled versus $12bln yesterday.

In NJ credit news, the NJ Supreme Court sided with Governor Christie and will not be required to make additional pension deposits to bring the states liabilities up to the accrual minimum.  This is a short term credit positive event for the state; however, it still delays the problem.  All NJ GO and St appropriated debt reacted positively to the news,  NJ Trans 5’s of 2042 traded @ 4.82% yesterday after trading closer to 5% last week.

PR paper remains extremely quiet as we approach the July 1st payments.  Volume in Benchmark GOs continues to be extremely light versus daily averages.  Bonds continue to trade right around 10% after trading closer to 11% in early May.

30-Day visible supply: $ 10.7bln

UST 10yr 2.417%