Monday, May 8, 2017

Corporate Bond Market

US Equity Futures are down to start the week with the DJ Futures -14 and the S&P Futures -1.25. Overseas equity markets are mixed through the overnight. US Treasuries are stronger with yields on the 10 yr last at 2.336% and oil is weaker, last quoted $46.08/barrel. Credit is tighter with the Investment Grade Index showing 44.45/45.89 and cash is weaker.

In credit news, last week’s primary market saw $39.425bn priced in Investment Grade Credit with domestic corps leading the charge. We are active in Eli Lilly, Northern Trust and Teachers Insurance. This week is expected to be another busy week in the new issue market with analysts’ consensus calling for at least $25bn. There are deals announced from Century Communities, CareTrust REIT and Woori Bank for today’s business.

Municipal Bond Market

Muni market volume is expected to rise to $9.36bn with $7.82bn being negotiated deals and $1.54 billion being competitive sales. This surge in volume will bring us to a 9-week high. Merrill is set to price bonds on Wednesday for the County of Cuyahoga, Ohio, and the State of Hawaii which are the two largest deals of the week. The Cuyahoga deal, which is rated Baa3 by Moody’s and BBB- by S&P and Fitch, includes $915 million of revenue bonds for the Metrohealth System Hospital. The second deal is the State of Hawaii’s $856 million GO bonds which are rated Aa1 by Moody’s, AA+ by S&P, and AA by Fitch.