Texas Market Update Week of December 10, 2018

Transcription

1 Texas Market Update Week of December 10,

2 bps Market Update * Commentary for the week of December 10 th On Friday the 10-year Treasury yield fell three basis points to 2.85%, while the 30-year Treasury yield remained unchanged at 3.14%, respectively, from Thursday s close. Furthermore, the 10-year and 30- year AAA rated muni yield rose one and two basis points to 2.38% and 3.10%, respectively, from Thursday s close. Municipal volume for this week is estimated to be $8.1 billion, higher than the revised total of $6.4 billion from the previous week. The primary municipal calendar is comprised of $6.9 billion of negotiated deals and $1.2 billion in competitive sales. Texas municipal issuance is estimated to be $728 million this week compared to the revised total of $508 million from the previous week. The primary Texas municipal calendar is comprised of $664 million in negotiated financings and $64 million in competitive sales. MMD Rates AAA 10 Y AAA 20 Y AAA 30 Y This week Estrada Hinojosa will in participate in two Texas financings: $194 million for Bexar County (Co-Manager) and $9.5 million for the City of Del Rio (F.A.). MMD to Treasury Ratios 125% 10Y MMD/10Y Treasury Ratios 20Y MMD/20Y Treasury Ratios 30Y MMD/30Y Treasury Ratios 1.00 AAA MMD to BBB MMD Spreads 10Y AAA vs BBB MMD Spread Y AAA vs BBB MMD Spread 30Y AAA vs BBB MMD Spread 100% 85 75% 60 Source: * Bond Buyer Municipal Market Data Thomson Reuters TM3 1

3 ($bn) Market Update Calendar Week of December 10 th Ratings* Bond Buyer 30-Day Visible Supply** Issue Description Sale (week of) Par Amount ($000) Moody's S&P Fitch Clifton Higher Edu Fin Corp, TX - Edu Rev Bds, Ser D and E (Taxable) Bexar Co., TX - Comb Tax and Rev CO's, Ser New Hope Cultural Edu Fac Fin Corp, TX - Edu Rev Bds, Ser A and B (Taxable) Gainesville Hosp Dist, TX - Lim Tax Ref Bds, Taxable Ser. 2018A City of Floresville, T X - Elect Light and Pwr Sys Improv Rev Bds, Ser City of Del Rio, TX - Comb Tax and Rev CO's, Ser /10 $ 345,935 NR NR NR 12/10 $ 193,715 Aaa AAA AAA 12/10 $ 56,660 NR NR NR 12/10 $ 41,880 Ba1 NR AA- 12/10 $ 16,000 NR AA- AA- 12/10 $ 9,500 NR AA- AA Bond Buyer 30 Day Visible Supply Bond Sales Volume AAA MMD yield curve*** 5.00 Dec-17 Nov-18 Dec-18 Texas Top 10 Total Negotiated Supply $ 663,690 Texas Total Negotiated Weekly Supply $ 663, Thru 12/14/2018 Thru 12/15/2017 Thru 12/16/2016 Thru 12/18/2015 Total Texas Supply YTD $33,521,155 $43,767,058 $55,575,612 $52,026, Year *Rating reflects underlying or insured rating, as appropriate **Source: Bond Buyer ***Source: Municipal Market Data 2

4 Bond Buyer Indices vs. 30 Year Treasury: 30 Year History 1 BB 11 GO Index BB Revenue Index Year Treasury BB 11 GO Index BB Revenue Index 30 Year Treasury High Low Average Current Dec-87 Dec-89 Dec-91 Dec-93 Dec-95 Dec-97 Dec-99 Dec-01 Dec-03 Dec-05 Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 Source: Bond Buyer 3

5 bps Tax-Exempt and Treasury Spreads: 1 Year History Bond Buyer Indices vs. 30 Year Treasury MMD Rates 5.00 BB 11 GO Index BB Revenue Index 30 Year Treasury AAA 10 Y AAA 20 Y AAA 30 Y MMD to Treasury Ratios 1.00 AAA MMD to BBB MMD Spreads 115% 105% 10Y MMD/10Y Treasury Ratios 20Y MMD/20Y Treasury Ratios 30Y MMD/30Y Treasury Ratios 10Y AAA vs BBB MMD Spread 20Y AAA vs BBB MMD Spread 30Y AAA vs BBB MMD Spread 95% 90 85% 75% 75 Source: Municipal Market Data Thomson Reuters TM3 Bond Buyer 4

6 Disclaimer This document is intended for discussion purposes only and, in conjunction with oral presentations and further negotiations, is subject to the final terms of definitive transaction related written agreements, if appropriate, and is not a commitment to lend money, underwrite or purchase securities or commit capital, nor does it obligate this firm to enter into written agreements. Terms and conditions described herein are an indicative summary which may be amended or replaced by subsequent summaries. This document is intended for the exclusive use of the entity identified on the cover page hereof or otherwise identified as the recipient by a member of the firm and may contain information proprietary to Estrada Hinojosa, which by acceptance of this document obligates you to use discretion when sharing the proposed terms for any prospective transaction. With this communication, Estrada Hinojosa is not assuming the role of your independent registered municipal advisor and is not attempting to establish a fiduciary relationship with you pursuant to the SEC s Municipal Advisor Rule. Estrada Hinojosa is acting in its own interests with a view to underwriting and distributing your municipal securities in an arm's length commercial transaction and you should discuss any action you intend to take with any and all internal or external advisors and experts that you deem appropriate before acting on this information or material In addition, Estrada Hinojosa does not provide accounting, tax or legal advice and any discussion of such matters herein should not be relied upon by you as a guarantee or commitment of a specific result should a transaction occur. All numbers and prices discussed herein are preliminary and indicative of market conditions on the date prepared and do not represent bids or offers, and you should determine, without reliance upon us, the economic risks and merits as well as the legal and tax consequences of any such transaction, keeping in mind that the results of analyses from any quantitative model which represent potential future events that may or may not occur, and that may not include every particular material fact related to a proposed transaction, are by their nature subject to further discussion and examination Estrada Hinojosa & Company, Inc. Member: FINRA & SIPC. All rights reserved. No part of this document may be reproduced in any manner without the written permission of Estrada Hinojosa & Company, Inc.