CREDIT MARKETS
Treasuries:
Short-term Treasuries gained Monday, pushing yields down after the Federal Reserve said it had begun buying mortgage-backed securities. Gains were limited and longer-term yields rose, however, due to concern about increasing government-debt issuance starting with $166 billion this week. The Treasury Department will sell $30 billion in 3-year notes on Wednesday. The government will also auction $16 billion in 10-year notes on Thursday, more than anticipated. The sale will be a second reopening of the quarterly issue, meaning the security will carry the same yield and maturity as the notes issued in November. The Fed’s New York branch said Monday it has begun purchasing fixed-rate mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. The purchases follow an announcement made in November that the Fed would buy up to $500 million in mortgage-backed debt from the major government-sponsored agencies to support the housing market. The curve was swung well steeper with the 2-10 year yield spread tagging 170. The economic calendar has ISM services and factory orders with the FOMC minutes out .
Municipals:
New Castle County, Delaware, led borrowers in the U.S. municipal market with $107 million of top-rated bonds today to fund sewer and library improvements and refinance decade-old debt, as benchmark 10-
year yields fell to the lowest in more than three months. Yields on debt due in 10 years to 3.89 percent, the lowest since Sept. The rally may end as bond sales increase after a three-week lull and demand from institutions such as banks, funds and insurers remains tepid compared with retail, or individual, investors. State and local governments led by New York plan to offer at least $3 billion of fixed-rate bonds this week, the most in four weeks, according to data compiled by Bloomberg. New York’s Empire State Development Corp. will seek to sell as much as $1.1 billion in debt backed by income taxes. The secondary market was fairly active. I was in touch with Madison NY 5% 7/33 at 5.45-5.40, NYC 5% 4/22 at 98.50-99.00. I was posted on MTA BHAC-insured 5% 7/33 98.00, Camden Imp 5 ¾ % 1/24 @ 4.97. We didn’t receive the final read on MMD.
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Commentary/New Issues
Corporate:
$1.0 BLN, Pacificorp, A3/A-, 2 part $350 MM, 5.50%, 1/15/19, +310bp; $640 MM, 6.00%, 1/15/39, +310bp
$1.25 BLN, Weatherford Int’l, Baa1/BBB+, 2 part $1.0 BLN, 9.625%, 3/1/19, +723bp; $250 MM, 9.875%, 3/1/39, +698.2bp
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 offerin mentioned and therefore offerings will be subject to availability.
All statistical data is sourced from Bloomberg Financial Markets