Monday, Aug. 17, 2015

Municipal Bond Market
Munis are unchanged this morning after a quiet trading day Friday.  The focus this week will be mostly on the secondary with such light new issuance (four deals will make up the majority of this week’s new issue calendar).  The most notable deal will be the pricing of $750mln in PRASA debt.  This is PRs first attempt to come to market since last year’s GO deal and the market will be watching closely to see what kind of demand their truly is.  Other notable names on this week’s calendar include, Detroit GOs, Portland Water and Sewer Authority, and the University of Chicago. 30-day supply is slightly stronger this morning with $9.5bln on tap over the next 30 days vs. $8bln Friday.

Muni funds recorded inflows of $11.08mln after seeing $308mln in outflows during the previous week.  The four-week moving average remains negative at $61mln in outflows.  The most notable inflow number was in HY, with %60mln in new cash flowing into funds.  We expect to see this money flow into the secondary this week such a light new issue calendar.

PR volume remains extremely light as the market awaits this week’s pricing of $750mln in PRASA debt.   The amount of items out for the bid continues to decline with almost no items trading and very few bidders.   Benchmark GO 8’s of 2035 continue to creep up with bonds trading as high as $73.30 (11.425%) after trading as low as $69 last week.

30-Day visible supply: $9.51bln


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