Morning Commentary: Fannie Mae prices; corporate supply quiet; Public Storage improves

By Cristal Cody

Tupelo, Miss., April 11 – The high-grade bond primary market opened on a fairly quiet note on Thursday with one reported issuer.

Fannie Mae priced $2 billion of 2.25% three-year Benchmark Notes at the start of the session with a spread of 6.5 basis points over Treasuries.

No corporate issuers announced offerings over the morning.

Deal volume week to date totals about $6 billion, compared to the $15 billion to $20 billion of supply syndicate sources predicted for the week.

Market sources had an eye on economic data releases over the morning. The Labor Department reported initial unemployment claims for the past week were 196,000, less than the 210,000 economists expected and the first time that weekly claims have been below 200,000 since November 1969, according to a Confluence Investment Management LLC report.

In the secondary market, new issues priced this week are trading mostly stronger, according to a market source.

Public Storage’s 3.385% senior notes due May 1, 2029 (A2/A) tightened more than 5 bps in the secondary market to trade in the 86 bps area.

The Glendale, Calif., real estate investment trust sold $500 million of the notes on Wednesday at a spread of 92 bps over Treasuries.

Waste Connections, Inc.’s 3.5% senior notes due May 1, 2029 (Baa2/BBB+/BBB+) that priced on Tuesday softened about 2 bps on Wednesday but remain about 2 bps better than issuance, a source said.

The company priced $500 million of the 10-year notes on Tuesday at a spread of Treasuries plus 103 bps.

Secondary market volume week to date includes $22.07 billion of investment-grade issues traded on Wednesday, $22.38 billion on Tuesday and $19.21 billion on Monday, according to Trace data.

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