CREDIT MARKETS
Treasuries:
Long term treasuries gained Wednesday, with lack of confidence in government plans to tackle the credit crisis pushing yields down for a second day, even as the U.S. Treasury auctioned the largest amount of 10-year notes ever. Bond yields fell by the greatest amount in at least two months Tuesday after Treasury Secretary Timothy Geithner announced his plan to use mostly private money to create a fund of at least $500 billion to recapitalize banks and another fund of $1 trillion to support consumer and business lending. The Treasury sold a record $21 billion of 10-year securities at a yield of 2.818 percent. Bidders offered $2.21 for every dollar available, compared with an average of $2.34 at the last four auctions of new notes. Indirect bidders, a class of investors that includes foreign central banks, bought 37.8 percent of the sale, the highest in a year. Concerns have run especially high in the last week that China, the single largest holder of Treasuries, will keep buying, even though some of the biggest Treasury dealers say there have been no signs of a decline. The government plans to finish its refunding operations Thursday with the sale of a record $14 billion in long bonds.
Municipals:
Tax-exempt borrowers plan to sell about $4.5 billion of fixed-rate bonds this week, compared with last year’s weekly average of $5.4 billion and last week’s $5.2 billion total. New York’s Metropolitan Transportation Authority $150M, Duke $249M, Mecklenburg County $244M. yields on AAA general obligation bonds due in 10 years eased one basis point, or 0.01 percentage point, to 3.28 percent, matching the low last reached Jan. 23, 2008. The average seven-day yield for money funds that invest in tax-free and municipal debt fell to a record 0.28 as Tax-free money funds, which invest in the highest quality securities, have grappled with a shortage of acceptable debt after last year’s credit rating reductions at insurers and banks reduced the suitable supply. The final read on the MMD was as follows 2011-2019: yields were lower by 1 bpts; 2020-2039 yields were lower by 2-3 bpts. NYC GO, NYC Waters and NYS Thruway will be accessing the capital markets next week. Secondary market activity was fairly. There were a few tow-sided markets and no trades. I was in touch with MTA’s5 1/8 31 ata 5.24-5.22, PR GO FSA 5.25 27 ata 98.75-99.00.
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Commentary/New Issues
Corporate:
$1.5 BLN, Marathon Oil, Baa1/BBB+, 2 part $700 MM, 6.50%, 2/15/14 +487.5bp; $800 MM, 7.50%, 2/15/19, +487.5bp $1.5 BLN, United Mexican States, 5.875%, 2/17/14, Baa1/BBB+, +425bp $1.0 BLN, MetLife, 7.717, 2/15/19, A2/A, +490bp
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 offering mentioned and therefore offerings will be subject to availability.
All statistical data is sourced from Bloomberg Financial Markets