CREDIT MARKETS
Treasuries:
Treasuries were little changed Thursday after the Labor Department said initial claims for unemployment benefits rose and wholesales prices declined. Applications for state unemployed benefits rose 54,000 to a seasonally adjusted 524,000 in the week ended January 10th. PPI fell 1.9 percent last month as demand for raw materials collapsed in the economic slump. Treasuries gained more support from concerns that Bank of America may need more government. The Treasury Department also said it’s calling for redemption 30-year bonds sold in 1984, to reduce its cost of debt. The 4.48 billion of the maturity outstanding carry a coupon of 13.25 percent, significantly above the current cost of financing. Manufacturing shrank in January in the Philadelphia region for the 13th time in the past 14 months and contracted in New York for a ninth straight month. The economic calendar for tomorrow has CPI, industrial production and the University of Michigan report.
Municipals:
The Pennsylvania Turnpike Commission leads U.S. state and local government borrowers with $317 million of bonds. The deal will finance January and April payments owed to the Pennsylvania Transportation Department for capital spending under a 2007 law known as Act 44, said Carl DeFebo, spokesman for the commission. Municipal borrowing costs have dropped since the Pennsylvania agency had to offer a yield of 6.5 percent three months ago to entice investors for 30-year bonds. The secondary market was bit tame. I was in touch with TFA 5.125 % 29 at a 5.29- 5.24. I was posted on TFA 5.375% 34 @ 5.48. Yields on top-rated 10-year general obligation bonds dropped to 3.41 percent yesterday, an 11-month low. The read on the MMD was 2011-2012: yields were lower by 5-8bp; 2013-2014: yields were lower by 1-4bp; 2015-2018: yields were lower by 0-2bp; 2019-2021: yields were lower by 0-1bp; 2022-2029: unchanged; 2030-2032: yields were lower by 0-1bp; 2033-2038: yields were lower by 0-2bp.
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Commentary/New Issues
Corporate:
$1.0 BLN, Wal-Mart, A2/AA, 2 part $500 MM, 3.00%, 2/3/14, +175bp; $500 MM, 4.125%, 2/1/19, +200bp
$500 MM, Emerson Electric, 4.875%, 10/15/19, A2/A, +270bp
ABS:
Nothing
Agency:
$3.5 BLN, FHLB, 1.625%, 1/21/11, +94bp
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 offering mentioned and therefore offerings will be subject to availability.
All statistical data is sourced from Bloomberg Financial Markets