CREDIT MARKETS

Treasuries:
Treasury prices gave up earlier gains Tuesday, sending yields higher, after the Federal Reserve bought $7 billion in U.S. debt, mostly maturing in 2016. A turnaround in stocks also decreased the appeal of bonds as an alternative asset. The Fed said it would be purchasing specific securities maturing between 2016 and 2019. However, almost half of its actual purchases were those due in 2016, with a very limited amount in 10-year debt, disappointing some analysts and leading to a bigger sell-off in longer-dated debt. Treasuries were supported earlier after Kansas City Fed President Thomas Hoenig said the current federal bailouts of big financial firms are distorting the economy and prolonging the crisis. The comments came in testimony to Congress about banks that are deemed “too big to fail.” Treasuries are also being pushed a bit by hedging activity before California’s taxable bond offering on Wednesday, expected to be up to $4 billion. California and other municipalities, which usually issue tax-exempt debt and have very little effect on the broader taxable market, have lined up to sell taxable Build America Bonds, part of Congress’ economic stimulus package earlier this year to encourage spending on infrastructure projects to create jobs. No economic news for tomorrow.

Commentary/New Issues

Corporate:
$300 MM, Toledo Edison, 7.25%, 5/1/20, Baa2/BBB, +437.5bp

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.