CREDIT MARKETS

Treasuries:
Treasury prices dropped Wednesday, pushing 10-year yields to six-month highs and sharply reversing earlier gains, moves which traders attributed to investors adjusting their holdings in expectation that higher mortgage rates would extend the duration of their portfolio. Short-term debt maturities were supported by the strong demand seen at the U.S. government’s auction of a record-matching $35 billion in 5-year securities, the second successful debt sale this week. Those securities are also less sensitive to mortgage-related hedging. The Treasury Department sold 5- year notes to yield 2.31 percent. Investors offered $2.32 for every dollar of debt sold, the highest since November. Indirect bidders, bought 44.2 percent of the new securities, well above the 36.2 percent on average in the last four sales and one of the highest proportions since 2007. Direct bidders, bought 2.8 percent of the sale, the highest since December. The curve went for record level steepness as the short end stays tied to the funds rate and the long end takes heat, with the 2 -10 year yield spread to 276. The day ahead has the spooky $26 billion seven year offering as well as initial jobless claims, durable orders and new home sales.

Commentary/New Issues

Corporate:
$1.0 BLN, Goldman Sachs, 7.50%, 2/15/19, A1/A, +337.5bp
$700 MM, Tailsman Energy, 7.75%, 6/1/19, Baa2/BBB, +412.5bp
$500 MM, Norfolk & Southern Corp., 5.90%, 6/15/19, Baa1/BBB+, +237.5bp
$350 MM, Allegheny Tech, 9.375%, 6/1/19, Baa3/BBB-, +578.5bp

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 FINRA/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.