CREDIT MARKETS
Treasuries:
Treasury prices declined Tuesday, sending 10-year note yields to the highest levels seen in a month, paring losses after the government’s first note auction of the week. Investors also focused on minutes released Tuesday afternoon from the Federal Reserve’s historic interest-rate meeting last month. Policymakers saw increasing risks of depression and deflation as they grappled with employing new tools to stabilize the economy. In earlier trading, Treasuries stayed lower after data showed further weakness in the services, housing and factory segments of the economy. The Institute for Supply Management’s non-manufacturing index made an unexpected modest improvement, though the reading indicated the industry is still contracting. The index rose to 40.6 in December, off from November’s 37.3. The Treasury Department sold $8 billion in 10-year Treasury Inflation Protected Securities, to yield 2.245 percent. Investor demand was strong, with $2.48 offered for every dollar available, the highest since at least 2002. Economic calendar has ADP employment has the highlight for tomorrow.
Municipals:
California began a $350 million sale of bonds backed by utility fees to convert variable-rate debt to fix rate. Also, Empire State Development Corp priced its $1B offering today which consist of $200M taxable bonds with maturities out to 2018. Municipal bonds may be tough to sustain as new offerings build after a holiday lull. Investors and borrowers looking to sell bonds “should act quickly before current pricing strength is reasonably diluted by supply,” Fabian wrote in a report yesterday. Municipal borrowers plan to offer more than $3 billion of fixed-rate bonds this week. Yields on top-rated 10-year general obligation bonds fell four basis points, or 0.04 percentage point, to 3.85 percent. Secondary market activity was relatively tame. I was in touch with MTA 5% 11/30 at 5.70-5.68, Dorms 5% 7/26 at 5.35-5.27. I was posted on San Mateo 4% 7/17 @ 3.80. We didn’t receive the final MMD.
Click to view larger:

Commentary/New Issues

Corporate:
$4.0 BLN, GE Capital Corp, 6.875%, 1/10/39, Aaa/AAA, +400bp
$1.20 BLN, Devon Energy, Baa1/BBB+, 2 part $500 MM, 5.625%, 1/15/14, +400bp; $700 MM, 6.30%, 1/15/19, +385bp
$500 MM, CenterPoint Energy, 7.00%, 3/1/14, Baa2/BBB+, +528.6bp

ABS:
Nothing

Agency:
$6.5 BLN, Freddie Mac, 2 part $3.0 BLN, 1.50%, 1/7/11, +77bp; $3.5 BLN, 2.50%, 1/7/14, +95bp
$277 MM, FFCB, 3.05%, 1/13/14

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