Agency spreads move in 1 to 2 bps as swaps widen; Fannie Mae announces new two-year issue

By Lisa Kerner

Charlotte, N.C., Oct. 5 - Agency spreads tightened 1 to 2 basis points on Tuesday, while swaps ended the day 2 to 3 bps wider, according to Michael Skinner, an agency trader with Wall Street Access.

Fannie Mae announced it will price a new issue of two-year Benchmark Notes due Oct. 30, 2012 on Wednesday.

Price talk was Treasuries plus 14 bps, said Skinner.

The two-year is "right on top of outstanding debt," Skinner said, noting that there is "an appetite for front-end agencies."

Barclays Capital Inc., JPMorgan and UBS Securities LLC are the joint lead managers. Co-managers include Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., FTN Financial Capital Markets, MFR Securities, Inc. and Williams Capital Group LP.

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