CREDIT MARKETS

Treasuries:
Treasury prices rose on Wednesday, pushing yields to the lowest this year, after a government report said retail sales dropped 2.7 percent in December, far more than expected. Purchases at U.S. retailers dropped in December for a sixth consecutive month, extending the longest stretch of declines since records began in 1992. Excluding autos, sales fell 3.1 percent, their biggest drop since record-keeping began in the early 1990s and compared to an anticipated 1.6 percent decline. A separate report showed import prices fell 4.2% last month, mostly due to oil prices. Bonds remained higher after a Federal Reserve report said real estate across the country continued to suffer under tight credit standards and layoffs and hiring freezes were common. U.S. stocks retreated, with the Standard & Poor’s 500 Index plummeting 3.6 percent, amid the retail-sales drop and speculation financial firms may need to raise more capital. Economic calendar has PPI and initial jobless claims.

Municipals:
Municipal bonds jumped the most in almost a month as Delaware sold AAA debt at yields lower than the first part of its offering two days ago and Chicago revived a sale delayed by higher costs in December. Chicago’s almost $600 million deal, to fund city projects and refinance debt for short-term budget relief. State and local government bonds have risen for more than four weeks amid demand for higher-yielding alternatives to federal securities and speculation that U.S. President-elect Barack Obama’s administration will aid municipal borrowers after his inauguration. Yields on top-rated 10-year general obligation bonds dropped 11 basis points, or 0.11 percentage point, to 3.41 percent. The Secondary market was tame. I saw no two-sided markets or trades. The final read on the MMD was 2010: yields were unchanged; 2011: yields were lowered 10bp; 2012-2014: yields were lowered 17-18bp; 2015-2023: yields were lowered 12-16bp;2024-2027: yields were lowered 8-10bp; 2028-2038: yields were lowered 4-6bp;
Click on chart to view larger:

Commentary/New Issues

Corporate:
$4.5 BLN, Morgan Stanley, Aaa/AAA, 3 part $1.25 BLN, 6/20/12, +3ML+35bp; $3.0 BLN, 1.95%, 6/20/12, +97.6bp; $250 MM, 6/20/12, +1ML+47bp
$750 MM, Pepsi Bottling, 5.125%, 1/15/19, A2/A, +300bp
$500 MM, CSX Corp., 7.375%, 2/1/19, Baa3/BBB-, +525bp
$300 MM, Metropolitan Edison, 7.70%, 1/15/19, Baa2/BBB, +550.2bp

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