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Agency spreads unchanged; Fannie Mae five-year Benchmark Notes talked at 91 bps area
By Lisa Kerner
Charlotte, N.C., March 11 - Fannie Mae announced it will price a new five-year issue under its Benchmark Notes program on Thursday.
Talk had the notes pricing at the 91 basis points area over Treasuries, sources said.
One trader expected "good demand" for the issue.
The Benchmark Notes have "typically come in fairly wide" compared to issues that are already out in the market, the trader said.
Lead managers for the new issue are Banc of America Securities, Citigroup Global Markets Inc., and Goldman Sachs & Co.
Wednesday's $18 billion auction of 10-year notes by the Treasury was "slightly weaker than expected" and "didn't damage the market," said a source, adding that there could be some worry that yields will go tighter.
The auction did put some selling pressure in the five-year sector right after the deal was announced, said a trader.
On Thursday, the Treasury will auction $11 billion in 30-year bonds, bringing its auction total for the week to $63 billion in notes and bonds.
Spreads on Wednesday proved to be unremarkable, maintaining the prior day's level, said a source.
Another trader called Wednesday's spreads "uneventful" on a day where "flows were muted."
There was little talk after Freddie Mac's announcement that it named John A. Koskinen as its interim chief executive officer, taking over for David M. Moffett whose resignation is effective March 13.
Koskinen had served as non-executive chairman of Freddie Mac since September 2008. He is a former deputy mayor and city administrator of Washington, D.C.
Robert F. Glauber was name as Freddie Mac's interim non-executive chairman.
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