CREDIT MARKETS

Treasuries:
Treasury notes fell for the first time in three days as stocks rallied and the government prepared to sell $54 billion of new debt following a $40 billion auction of two year notes. Earlier, bonds had mostly been higher as Federal Reserve Chairman Ben Bernanke said that the bigger risks to the U.S. economy remain on the downside and that the government’s actions taken to fix banks and financial institutions will take time to work. The new 2-year notes were priced to yield 0.961 percent. Bidders offered $2.63 for every dollar available, better than the $2.35 average of the last four auctions. On Wednesday, the government will sell $32 billion in 5-year notes followed by $22 billion in 7-year debt on Thursday, the first sale for this maturity since 1993. Equities also recovered as the day went on, to the detriment of bonds. If the Obama administration and the Fed are successful in their strategy for restoring some measure of bank stability, “there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery,” Bernanke said in testimony on monetary policy. Economic news tomorrow will focus on existing home sales.

Municipals:
Colorado’s Boulder Valley School District led auctions of U.S. fixed-rate municipal bonds as benchmark tax-exempt yields rose for a fourth day. The Boulder, Colorado, system sold $177 million of general obligation bonds today to finance two replacement schools and other improvements through Bank of America Corp.’s Merrill Lynch & Co., the bidder that offered the lowest interest cost. New York City, the week’s largest municipal borrower, continued taking orders from individual investors for a $520 million debt sale run by Citigroup Inc. and set to conclude tomorrow. Tax-exempt bonds slid as investors balked at yields that fell below 2 percent on securities due in the next five years. Ten-year AAA yields rose two basis points, or 0.02 percentage point, to 3.37 percent today, the highest in three weeks. The entire yield curve shifted 1-2 bpts higher.

Commentary/New Issues

Corporate:
$1.0 BLN, Noble Energy, 8.25%, 3/1/19, Baa2/BBB, +550bp
$250 MM, Vanderbilt University, 5.25%, 4/1/19, Aa2/AA, +250bp

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