Corporate Bond Market
US equities were down big on Friday as oil fell, closing close to $35/bbl, and credit widened out. Global equities are down today (Stoxx -0.84% and Nikkei -1.8%). US equity futures are off this morning (DJIA -33 and S&P -3.00). Oil is down again this morning for the seventh day, dropping $0.85/bbl to $34.75/bbl. Oil has not been this low since 2009 and natural gas has slumped to a 13-year low. The IG widened by 9bps on Friday, a large move for the index, and is out again this morning by 2bps at 97.8/99.3. US treasuries are down across the curve with the 10 year at 2.144%.
Newell Rubbermaid has agreed to buy Jarden Corp. for about $13.2bn. Another high yield credit fund announced that it had liquidated its entire portfolio and plans to return the $900mln it has under management to investors next month.
There were no bonds issued in the primary market on Friday and there are no economic releases today.
Municipal Bond Market
Munis are weaker this morning after rallying across the curve on Friday. We saw strong demand for the long end in secondary trading as buyers put cash to work ahead of this week’s light new issue calendar. University Hospital priced on Friday and immediately traded up in the secondary with 4.125% of 2038 pricing @ 4.15% and trading as high as a 3.97%. The primary will be light this week with only $2.1bn scheduled versus $7.5bn last week. 30-day supply is weaker this morning with$4.3bn on tap over the next 30 days versus $5.4bn Thursday.
PR paper was quiet heading into the weekend on light volume. We expect to see below average demand as we approach January debt payments. Benchmark GO 8% of 2035 traded @ $74.50 to end the day versus trading around $75.00 earlier in the day.
30-Day visible supply: $5.4bn
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