Thursday, June 22, 2017

Corporate Bond Market

US Equity Futures are down to start the session with the DJ Futures -13 and the S&P Futures -1.75. The global tone is mixed with European and Asian equity markets mixed through the overnight. US Treasuries are stronger with yields on the 10yr last at 2.15% and crude oil is up; last quoted $42.75/barrel. Credit is wider with the Investment Grade Index showing 44.78/46.06 and cash is tighter.

In credit news, yesterday’s primary market saw $11.45bn priced from 5 issuers in Investment Grade Credit; June’s tally is up to $68.075bn. YTD High Yield issuance totals $135bn. From yesterday’s new deals, we are active in EDP Finance, Owens Corning and Suntory Holdings.

In economic data, Initial Jobless Claims rose to 241,000 outpacing survey estimates of 240,000 and Continuing claims also grew larger than survey estimates. Later, FHFA Monthly House Price Index will be reported followed by Consumer Comfort and Economic Expectations.

Municipal Bond Market

For a third straight day, munis finished unchanged as the biggest non-rated deal of the year finally came to market. Goldman was given the opportunity to price Wisconsin’s Public Finance Authority’s $1.09 billion revenue bonds for the American Dream Project in the New Jersey Meadowlands. According to market sources, the deal was oversubscribed by about 1.5 times in spite of a week-long delay to price the deal. The $800 million of tax-exempt limited obligation PILOT revenue bonds were priced at par to yield 5% in 2027, as 6.5’s to yield 6.25% in 2037, as 6.75’s to yield 6.375% in 2042, and as 7’s to yield 6.625% in 2050. The $268.4 million of tax-exempt bonds were priced as 6.25’s to yield 6.385% 2027 and as 6.75’s to yield roughly 6.861% in 2031. Last but not least, the $18.6 million of taxable bonds were priced at par to yield 5.625% in 2024.