Agency spreads widen unexpectedly; Freddie Mac buys short-term debt

By Lisa Kerner

Charlotte, N.C., June 8 - Agency spreads ended Monday 2 to 3 basis points wider, according to a trader.

The widening was "not exactly what you'd expect," said the trader, on a day when the market was down and both agencies and Treasuries were selling off.

Freddie Mac announced it accepted approximately $18 billion of tendered debt securities in its week-long tender offers that ended on June 5.

An agency spokesperson had called the offers "a liability management trade" that Freddie Mac would fund using cash on hand.

The securities, which had a total principal amount outstanding of $69.9 billion, ranged in maturity from September 2009 to August 2010.

The agency had been offering to buy up to $30 billion of the debt.

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