Thursday, September 8, 2016

Corporate Bond Market

US Equity Futures are weak to start the day with the DJ Futures -53 and the S&P Futures -5.25. Overseas equities are trading lower through the overnight. Oil is up to $46.30/ barrel and rates are weaker with the 10yr Treasury last at to 1.563%. Credit is wider with the Invest Grade Index showing 72.448/72.886 and cash is also weaker.

In credit news, yesterday’s primary market saw $24.925bn priced in Investment Grade Credit and $3.845bn priced in HY Credit. Today is expected be another day flooded with new issuance. There are deals from BMW, Capital One, Metlife, TD Bank, and many more.

Municipal Bond Market        
Munis were unchanged on Tuesday as the market focused heavily on new issuance.  Buyers seem hesitant to put money to work here as they await allocations on new deals and a large calendar looming next week.  The highlight of today’s trading session will be the pricing of 290mln NY Tobacco bonds.  The bonds will range in ratings from A on the front end to BBB on longer paper.  The deal is expected to receive heavy demand from institutional customers across the curve.  Supply is weaker this morning with $14.7bln on tap over the next 30 days versus $15bln on Wednesday. 

PR paper continued to rally for the 5th straight day with COFINA subs and GOs seeing the biggest move.  COFINA subs with 6 coupons are now trading in the mid $50s after trading closer to $50 for most of August.   Insured paper has seen the greatest demand with aggressive buying across the curve from both dealers and customers. 

30 Day visible supply: 14.7bln