CREDIT MARKETS
Treasuries:
Treasuries were off earlier lows Tuesday, and yields fell from highs, after stocks lost ground as investors digested housing data and a bleak assessment of the economy from Federal Reserve Chairman Ben Bernanke. Speaking on Capitol Hill, Bernanke said that most recent economic data, including on the labor market, showed little sign of improvement in recent weeks. After rising firmly in morning trade Tuesday, stocks turned negative before moving back slightly into positive ground. Also on Tuesday, the Federal Reserve and Treasury launched their $200 billion Term Asset-Backed Securities Loan Facility, a lending program that could generate up to $1 trillion in loans to small businesses and consumers. The New York Fed will lend up to $200 billion to owners of high-rated asset-backed securities, such as consumer loans, auto loans, student loans, credit cards, or small-business loans. The program is designed to circumvent credit channels that are now blocked up to stimulate the economy. The index of pending home resales fell 7.7 percent after a 4.8 percent gain in December, signaling the house slump will extend well into a fourth year. Economic news tomorrow will focus on the ADP employment change.
Municipals:
Utah and Maryland led municipal borrowers today with general obligation bond sales that included each state’s first major effort to target individual investors, as benchmark tax-exempt yields rose for a 10th day. Utah, the fastest growing U.S. state by population, sold $394 million of top-rated bonds to fund highway work. About $197 million went to retail buyers. Maryland, the wealthiest state by median household income, sold about $292 million of AAA bonds in its retail order period. Yields on the highest rated tax-exempt bonds rose one to three basis points today. The 30-year yield reached 5.29 percent, the highest since Jan. 26. More than 85 percent of bonds issued in the municipal market this year came from negotiated offerings, up from 75 percent during the comparable period in 2008. Many more issuers are moving to the negotiated segment, in order to attain stronger access” to individual investors. This move may actually help smooth out volatility by putting a larger proportion of new issues into the hands of final investors. The final read on the MMD was as follows:
2010-2015 yields were higher by 3-4 bpts; 2016-2020 yields were higher by 8-btps; 2021-2032- 3-6 bpts; 2032-2039 yields were lower by 1-2 bpts.
Commentary/New Issues
Corporate:
$2.5 BLN, Coca Cola, Aa3/A+, 2 part $900 MM, 3.625%, 3/15/14, +185bp; $1.35 BLN, 4.875%, 3/15/19, +205bp
$2.4 BLN, Eli Lilly, 3 part $1.0 BLN, 3.55%, 3/6/12, +230bp; $1.0 BLN, 4.20%, 3/6/14, +237.5bp; $400 MM, 5.96%, 11/15/37, +240bp
$1.5 BLN, State Street Corp., 2.15%, 4/30/12, Aaa/AAA, +88bp
$550 MM, Pacific G&E, 6.25%, 3/1/19, A3/BBB+, +270bp
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