Wednesday, May 17, 2017

Corporate Bond Market

US Equity Futures are weaker to start the day with the DJ Futures -85 and the S&P Futures -10. Overseas equities are mixed through the overnight with Europe trading lower and Asian markets mixed. US Treasuries are stronger with yields on the 10 yr last at 2.287% and oil is up, last quoted $48.91/barrel. Credit is wider with the Investment Grade Index showing 44.23/45.66 and cash is also weaker.

In credit news, Tuesday’s primary market saw $10.95b priced from 6 issuers in Investment Grade Credit bringing the monthly tally to $103.045b. From yesterday’s new deals, we are active in PNC and Morgan Stanley.

In economic data, Mortgage Applications dropped 4.1% last week.

Municipal Bond Market

Munis finished stronger yesterday as the yield on the 10-year benchmark muni general obligation fell two basis points to 2.09%. The Los Angeles Unified School District’s $1.08 billion of refunding bonds was priced for institutions on Tuesday in a deal rated Aa2 by Moody’s and AAA by Fitch. Morgan Stanley priced the School District’s dedicated unlimited ad valorem property tax general obligation refunding bonds as 5’s to yield 0.74% in 2017, 0.83% in 2018, 0.96% in 2019, as 4’s to yield 1.25% in 2021, and 4’s and 5’s to yield 2.28% in a split 2027 maturity. Yesterday we also saw Wells Fargo price the NY Dorm Authority’s $680.95 million of tax-exempt and taxable revenue bonds for New York University. The deal, which is rated Aa2 by Moody’s and AA-minus by S&P, came in two parts. $452.97 million of Series 2017A tax-exempts were priced as 4’s to yield from 0.97% in 2019, 5’s to yield 3.15% in 2040 and 3.17% in 2043. $227.98 million of Series 2017B taxables were priced to yield 1.599% in 2019, 3.729% in 2032, 3.779% in 2034, 3.998% in 2039 and 4.148% in 2047. Tomorrow we will see a deal from Sibert Cisneros Shank involving the District of Columbia’s $576 million of Series 2017A GOs.