CREDIT MARKETS

Treasuries: Treasuries continued to advance on Thursday, keeping yields near record lows, with economic reports still painting a bleak picture of the economy and with fixed-income assets benefiting from the Federal Reserve cutting interest rates to record lows. First-time claims for state unemployment benefits dropped 21,000 to 554,000 in the week ended Dec. 13, easing back part of a surge in the prior week. The Philly Fed diffusion index rose to negative 32.9 in December from negative 39.3 in November. The reading in November was the worst since October 1990. Treasuries hit highs as General Electric Co.’s debt rating outlooks and those of its GE Capital finance arm were changed to negative from stable by Standard & Poor’s. The Treasury will auction a record $38 billion of two year notes December 22nd and an all time high $28 billion of five year securities December 23rd. The curve was sticking to the flattening track with the 2-10 year yield spread heading out near 140, flattest since mid-September. Economic calendar is empty tomorrow.

Municipals: U.S. municipal bonds extended their biggest gains since October. Municipal borrowers including Chicago, the University of San Francisco and Austin, Texas, delayed until January offerings that had been set to go to market as soon as this month. Bond dealers have scheduled “a large primary calendar” for the first two weeks of 2009, when principal and interest payments as well as auction-rate settlement money may draw renewed interest from investors. Yields on top-rated 30-year general obligation bonds fell 12 basis points, or 0.12 percentage point, to 5.63 percent, this week’s 22-basis- point drop was the biggest in 10-weeks. I was in touch with LIB 5 ¼ % 35 8:00-7.75. I was posted NYC Wtr 4 ¼ % 6/33 @ 6.1, METS 5% 1/36 @ 7.92. The read on the MMD was as follows 2011: yields were lower 2-4bp; 2012-2013: yields were lower 4-7bp; 2014: yields were lower 7-10bp; 2015-2017: yields were lower 8-11bp; 2018-2019: yields were lower 9-12bp; 2020-2038: yields were lower 10-15bp
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Commentary/New Issues
Corporate:
$2.0 BLN, United Mexican States, 5.95%, 3/19/19, Baa1/BBB+, +390bp$600 MM, Energy Transfer Partners, 9.70%, 3/15/19, Baa3/BBB-, +878bp$7.75 BLN, JPMorgan Chase, Aaa/AAA, 3 part $3.0 BLN, 6/22/12, +3ML+38bp; $3.0 BLN, 2.125%, 6/22/12, +121.7bp; $1.75 BLN, 2.625%, 12/1/10, M/S +18bp
ABS:
Nothing
Agency:
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 offerinmentioned and therefore offerings will be subject to availability.
All statistical data is sourced from Bloomberg Financial Markets