Friday, Oct. 2, 2015

Corporate Bond Market
European stocks are up today after ECU bank president Draghi said growth is returning to the region. In the US, stock futures are up this morning with DJIA +61 and S&P + 7. Investors are processing this morning’s September payroll numbers, which missed analyst expectations, making many question how this will affect the Fed’s anticipated interest rate hike. Oil was up again this morning by $.45 at $45.19/bbl. Credit opened flat and US treasuries were off a touch with the ten year 2.05%.

There were just a couple of deals in the new issue market. Southern Company issued $875 million of Junior Subordinated 60yr NC 5-year $25 par preferred stock at 6.25%. Enbridge Energy (Baa3/BBB) did a three-tranche deal with 5yr, 10yr, and 30yr tranches. The deal had to be priced above the initial price talk. The bonds are trading better this morning.

Economic data: Non Farm payrolls (8:30am), Unemployment rate (8:30), ISM NY (9:45)and Factory orders (10:00am).


Municipal Bond Market
Munis are unchanged this morning after a mixed trading day yesterday. Attention shifted to the secondary market with the majority of this week’s new issuance wrapped up.  The primary performed very well this week with extremely strong demand for most deals across the curve.  Attention will be the primary again next week with almost $9 billion in deals scheduled.  Muni funds reported outflows of about $250 million last week which should not put too much pressure on the market. 30-day supply is strong this morning with $14 billion on tap over the next 30 days versus $12.5 billion yesterday.

PR trading remains extremely light as we continue to wait on more news out of the island.  The most active trading remains in GDB, PRASA, COFINA and GO paper with very few PREPA trades over the past week.  We continue to see very little trading benchmark GOs.  There were no institutional trades in GO 8’s of 2035 on Thursday.

30-Day visible supply: $14bn


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