Treasuries:
Treasury prices advanced Monday, pressing yields down by the most in two weeks, amid fresh concerns about the state of the nation’s financial system as American International Group accepted billions more in government aid. U.S. equities dropped more than 3%, passing through the lows set in November and following declines in European and Asian stock markets to start the week. The U.S. government said it is again revamping its bailout of insurance giant AIG this third time committing up to another $30 billion of taxpayer money and increasing its stake in the company to keep it from failing on its financial contracts. Further contributing to the trading tone, global banking giant HSBC Holdings said that it will shut its U.S. consumer-lending business and that it needs to raise billions more from shareholders. Treasuries also shrugged off the Institute for Supply Management’s index of manufacturing activity, which said the industry was not as weak as expected in February. Economic news for tomorrow will focus on total vehicle sales.

Municipals:
Maryland leads U.S. state and local government borrowers planning to sell more than $5 billion of bonds, the largest slate of offerings in three weeks. Maryland wants to raise as much as $515 million in its first general obligation bond sale to target individual buyers through negotiation with banks marketing the debt. Six other municipal issuers, including New York state and California State University, each plan to sell $400 million or more. Tax-exempt bonds have extended declines that began in mid- February, after individuals rebuffed “too-low absolute yields” on highly rated securities. Some investors think that the President’s tax hikes should help muni relative valuations, but the fiscal condition of issuers will also have a significant impact.” Billionaire Warren Buffett, in his annual letter to shareholders, said local governments will face “far tougher fiscal problems in the future than they have to date,” weighed down by pension liabilities and revenue shortfalls. Yields on AAA 10-year general obligation bonds rose 0.01 percentage point to 3.45 percent, the highest in almost five weeks. The final read on the MMD was as follows 2010-2019 yields were higher by 3-4 bpts; 2019-2039 yields were higher by 1-2 bpts.

Commentary/New Issues

Corporate:
$500 MM, Consumers Energy, 6.70%, 9/15/19, Baa1/BBB, +380bp
$500 MM, FPL Group Capital, 6.00%, 3/1/19, A2/A-, +310bp
$300 MM, Pitney Bowes, 6.25%, 3/15/19, A1/A, +337.5bp

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

Treasuries:
Treasury prices headed for a weekly loss, although short-term debt held gains Friday following government data that showed the U.S. economy contracting at a faster pace than investors had been bracing for. Treasuries advanced earlier in Friday’s session, playing off revised fourth-quarter figures for gross domestic product. GDP fell a seasonally adjusted 6.2 percent on an annualized basis in the final three months of 2008, the fastest pace since 1982. Bonds pared Friday’s gains as U.S. equities clawed back from deeper declines, however. Along with the GDP figures, investors reacted to the government’s announcement that it’s taking a larger stake in Citigroup in an effort to prop up the embattled bank. Also engaging bond traders was the aftermath of this week’s major U.S. debt auctions, with the government selling a total of $94 billion in notes — record offerings of 2- and 5-year notes as well as the first auction of 7-year notes since 1993. Economic news for next week will focus on the nonfarm payroll report on Friday, economist are projecting that 650,000 jobs were loss in February.

Municipals:
U.S. municipal bonds fell for the second straight week as borrowers led by New York City raised yields and a measure of pending debt offerings jumped to the highest in three weeks. New York raised $720 million to finance public works. The city offered seven-year bonds at 129 basis points greater than AAA-MMA curve, up from 48 basis points at its sale in December. Municipal borrowers have scheduled $12.5 billion in bond sales for the next 30 days. California for the first time sold its general obligation bonds to another public entity, the state sold $194 million of bonds to the Bay Area Toll Authority to fund 11 road projects in the San Francisco Bay area and elsewhere in northern California. Yields on 30-year, AAA general obligation bonds rose 7 basis points this week to 5.25 percent, the highest since Jan. 29. The secondary market was fairly quiet. I saw no two-sided markets and was not posted on any trades. The final read on the MMD was as follows: 2010-2020 yields were higher by 2-3 bpts; 2021-2039 yields were unchanged.

Commentary/New Issues

Corporate:
Nothing

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