Thursday, Jun. 4, 2015

Municipal Bond Market
Munis are slightly weaker this morning due to a sell-off led by the Euro zone’s government bonds, resulting in U.S. and German 10-yr bond yields settling near their highest levels of the year.  The current 10-yr benchmark (Bloomberg AAA Benchmark Yields) rose to 2.32% from 2.31% yesterday.

Chicago sold $112mln of bonds backed by sales-tax revenue in concluding their refinancing efforts.  This anticipates conversion of variable-rate debt into fixed-rate bonds to end bank letters of credit and interest rate swaps.  The yields on some maturities were as much as 160bps higher than top-rated debt.  The sales-tax bonds were graded AAA by S&P, BBB+ by Fitch, and Ba1 by Moody.

In PR credit news, Prepa remains weeks away from its $416mln debt payment.  Securities maturing in 2028 rose from about 37 cents (2014) to 52.6 cents on the dollar.  Tax-exempt bonds currently yield approximately 12.5%.

30 Day Visible Supply: 11.49bln.