CREDIT MARKETS

Treasuries:
Treasuries fell, pushing 30 year bond yields to a six week high, amid concern debt sales will swell as Treasury Secretary nominee Timothy Geither told Congress to expect a recovery plan in a “few weeks.” Investors expect debt issuance to increase this fiscal year, possibly beyond the $2 trillion already anticipated, as President Barack Obama supports billions of dollars in government programs to revive the economy. Stocks gained on speculation Obama’s rescue plan will shore up banks. The Standard & Poor’s 500 Index climbed 4.4 percent. The difference between the two and ten year yields widened to 1.77 percent, the most since December 15th. The fallout from the worldwide credit crisis is battering the European economy and prompting sovereign debt reassessments by ratings companies. The FDIC said January 16th it plans to extend its programs for guaranteeing bank debt, an effort to open credit markets, to cover notes with maturities of as long as 10 years. On the economic calendar for tomorrow there will be housing starts, building permits and initial jobless claims.

Municipals:
U.S. municipal bonds declined for a second day as Treasuries fell and Connecticut cut prices and raised yields to entice investors to its $414 million offering of fixed-rate transportation revenue bonds. Connecticut lifted yields by as much as a half-percentage point during a three-day sale that ended Wednesday. Yields on 10-year AAA general obligation bonds rose four basis points, or 0.04 percentage point, to 3.46 percent, the highest in a week. New Jersey sold $175 million of school construction bonds backed by state contract payments at yields as high as 5.9 percent. A five-week run-up in state and local bond prices ended yesterday as investors balked at tax-exempt yields that had fallen about 1.5 percentage points from last year’s peaks. The NYC WFA also took retail orders on its offering. Preliminary indications are approx $90m. The final read on the MMD: 2009 -2018 yields were higher by 3-7 bpts; 2019-2038 yields were higher by 9-12 bpts. I was in touch with Bulloch Dev GA 5% 8/26 ata 5.25-5.23, LIPA AGO 5% 35 aata 5.35-5.32. I was posted on NJ Econ Mddlsx WT 5.35% 2/38 @ 6.55, TFA 5.125% 29 @ 5.40.
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Commentary/New Issues

Corporate:
$750 MM, Duke Energy, 6.30%, 2/1/14, Baa2/BBB+, +475bp

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.