CREDIT MARKETS
Treasuries:
Treasury prices extended earlier gains Thursday afternoon after the U.S. government received decent demand for a record large sale of 7-year notes, temporarily putting to rest fears that the government may have trouble finding buyers for its massive debt plans this year. The sale followed lackluster reception for Wednesday’s $34 billion auction of 5-year notes, which had reignited fears that the government would have to pay more to sell an anticipated $2 trillion in Treasuries for the fiscal year ending Sept. 30. The results also gave an additional boost to stock markets, as worries over the ability of the U.S. to finance its various economic-stimulus spending and tax cuts, as well as Federal Reserve programs to grease the wheels of credit markets.
The Treasury Department sold $24 billion in 7-year notes at a yield of 2.384 percent, about the level traders anticipated. At the auction, bidders offered $2.52 for every dollar available, compared to $2.11 at last month’s sale. It was only the second auction of the maturity in more than a decade. Indirect bidders, bought 28 percent. At last month’s auction, they took 38.7 percent. Direct bidders took another 7.6 percent, well above last month’s portion. Economic news for tomorrow will focus on the University of Michigan confidence, personal income and spending.
Commentary/New Issues
Corporate:
$500 MM, Cornell University, Aa1/AA, 2 part $250 MM, 4.35%, 2/1/14, +257.5bp; $250 MM, 5.45%, 2/1/19, +270bp
$300 MM, Newell Rubbermaid, 10.60%, 4/15/19, Baa3/BBB-, +825.4bp
$250 MM, Sunoco Inc., 9.625%, 4/15/15, +800bp
ABS:
(priced) $514 MM, CNH 2009-A, ABS
Agency:
$8 BLN, Freddie Mac, 2 part $5.0 BLN, 1.625%, 4/26/11, +71bp; $3.0 BLN, 3.750%, 3/27/19, +99bp
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.