Thursday, Dec. 10, 2015

Corporate Bond Market
Global equities are down today as weak retailers offset a rebound in mining stocks (Stoxx -.48 and Nikkei -1.32%).  US futures are up this morning with the DJIA +29 and S&P +5 pointing to a rebound in stocks after a three-day drop.  Oil is flat this morning at $37.14/bbl.  OPEC disclosed that it had raised crude output to the highest level in more than three years as it pressed on with a strategy to protect market share and pressure competing producers.  US treasuries are unchanged as we open this morning with the ten year at 2.215%.  Credit is unchanged this morning at 85.75/86.25.

Yesterday Freeport-McMoRan joined Anglo American in announcing output cutbacks in a bid to preserve cash amid a meltdown in commodity prices. The Dow-DuPont  is still in the news and should clear a US antitrust review if the companies sell off a few pieces, according to lawyers and analyst.

In the primary market yesterday Bank of Nova Scotia did a 10yr bank sub debt deal at +230. But Visa finally came to market to raise money for the $21.1bn acquisition if Visa Europe in what was the fourth largest deal of the year.  The deal was a six-tranche 2, 5,7,10,20, and 30yr and totaled $16bn.

Economic data: Import Price Index (8:30am), Initial Jobless Claims(8:30am),Continuing Claims (8:30am), Bloomberg Consumer Comfort (9:45am) and Household Change in Net Worth(12:00am). 


Municipal Bond Market
Munis are unchanged this morning after strengthening on the long end for the fourth straight day.  New issuance continues to be the focus of the market.   Clemson University sold $210mln in debt with 4%s of 2046 priced to yield 3.46%, which was met with extremely strong demand.  The highlight of today’s calendar will be $260mln NJ University Hospitals.  The deal is already more than 5x oversubscribed.   30-day supply is weaker this morning with $5.5bn on tap over the next 30 days versus $6.9bn Wednesday.

In PR news, a bill was introduced Wednesday night that would establish an authority that could issue bonds and provide up to $3bn in aid to the commonwealth.  The bill also would take the option of bankruptcy off the table.  PR paper was unchanged on the news in early trading, however, this bill is definitely credit positive for all PR credits. 

30-Day visible supply: $5.4bn


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