CREDIT MARKETS

Treasuries:
Thirty-year Treasury bonds gained the most this year after the government’s sale of $10 billion of the securities drew the strongest level of demand from investors including foreign central banks in 2 1/2 years.

The auction came as investors sought the relative safety of government debt after a report showed initial claims for jobless benefits climbed to a six-year high and shares of insurer American International Group Inc. tumbled, leading to the first drop in the Standard & Poor’s 500 Index in three days. The yield on the 30-year bond plunged 15 basis points to 4.55. The 10-year note yield declined 14 basis points to 3.92 percent. The decrease was the greatest since March 19, the week the Federal Reserve cut interest rates, opened the discount window to investment banks and arranged the sale of Bear Stearns Cos. to forestall a financial-market crisis. The two-year note yield dropped 15 basis points to 2.42 percent.

Municipals:
Municipal bonds rose, pushing down benchmark 10-year yields the most in two weeks, as Treasuries rallied and debt offerings by tax-exempt borrowers declined from prior day.   Issuers including Arlington, Texas, which was scheduled to convert $164 million of MBIA Inc.-backed variable-rate debt into fixed- interest bonds, postponed the offering.  Among actively traded existing debt, 30-year Salt River Project, Arizona, electric system revenue bonds paying 5 percent traded between dealers in a $1 million-plus block at a price of 101.14 cents on the dollar to yield about 4.85%, compared with a similar trade at 100.58 and 4.92% the prior day.  The secondary market was fairly active as we saw few two-sided markets and were posted on several trades.  We were in touch with Dorm-NYU 5% 38 at 5.05-100, TBTA 5% 32 at 99 3⁄4 - 100 1/4, NY URB Dev 5% 18 at 4.06- 4.02. We were posted on NYC Wtr 4 3⁄4% 30 @ 98 7/8, MTA 5% 30 @ 5.10, Yankees 5% 31 @ 5.18, Mets 5% 36 @ 5.20.  The final read on the MMD was as follows 2009: yields were unchanged; 2010: yields were lowered 2bp;2011-2013: yields were lowered 3bp; 2014-2016: yields were lowered 4bp; 2017-2024: yields were lowered 5bp; 2025-2033: yields were lowered 6bp; 2034-2038: yields were lowered 7bp.

Commentary/New Issues
Corporate:
$1.3bln   CME Group, Aa3/AA, 3ml+20 8/09, 3ml+65 8/10, 5.40% 8/13 +225
$2bln      Societe Generale, Aa2/AA-, 3ml +41,+43,+45,+47,+49 9/4/13
$850mm Caterpillar Finance, A2/A, 3ml+50 8/10 and 4.90% 8/13 +175
ABS: Nothing
Agency: Nothing
Municipal: Nothing

New Issues larger than $250mm.   The fixed income offerings mentioned above are for informational purposes only. Toussaint Capital Partners, LLC, member NASD/SIPC, and/or its affiliates may be a participant in the offerin mentioned and therefore offerings will be subject to availability.

All statistical data is sourced from Bloomberg Financial Markets

Toussaint Capital Partners, L.L.C (TCP) is a registered broker/dealer and member NASD/MSRB/SIPC.  No part of this report may be reproduced in any manner without the express written permission of its author and any unauthorized dissemination is strictly prohibited.  Any information represented in this report is for informational purposes only.  All opinions in this report are subject to change without notice, and are not intended as an offer or a solicitation to buy or sell any securities.  Any views or opinions presented in this report are solely those of the author.  The owners and employees of TCP or affiliates may also be conducting trades based on these ideas.  While the information contained in this transmission is believed to be reliable, no representation or warranty, whether expressed or implied, is made and no liability or responsibility is accepted by TCP or its affiliates as to the accuracy or completeness thereof.  The author has not independently verified such information.

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