Fannie Mae prices $6 billion Benchmark Notes, gains 5 bps in trading; agency spreads tighten

By Lisa Kerner

Charlotte, N.C., April 8 - Fannie Mae priced $6 billion of new 1.375% two-year Benchmark Notes on Tuesday at 60 basis points over Treasuries.

One trader said the notes finished trading 5 basis points tighter, calling it "a great trade."

Another source told Prospect News demand for the notes reached $13 billion, with a 54 bps bid offered in the secondary market.

The Benchmark Notes sold primarily in the United States, which took down 74.2% of the total, according to Fannie Mae.

Other regions were Asia, which accounted for 20.0%, followed by Europe at 2.9%, the agency said.

Fund managers lead the way among investors, taking 60.2% of the total, followed by central banks at 19.9% and commercial banks at 14.2%, according to Fannie Mae.

The new Benchmark Notes mature April 28, 2011 and priced at 99.759 to yield 1.495%.

Also on Wednesday, the Treasury auctioned $59 billion in coupons, which included a record $35 billion of three-year notes.

One trader said he didn't see "a real negative effect" of having the Treasury auction and the Fannie Mae Benchmark Notes so closely tied.

Agency spreads on Wednesday were in by 1.5 to 3 bps.

"The short end got a lot of attention," according to a source.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.