Freddie Mac Sold $6 Billion, 3-Year At Treasurys +46.5 BPs
May 19 2009 - 11:43AM
Dow Jones News
Freddie Mac (FRE) sold $6 billion of three-year reference notes
Tuesday.
The deal, which was announced Monday, saw its order book balloon
to $12 billion mostly on demand from domestic investors.
The tightening of credit spreads helped firm up the price on the
deal to 46.5 basis points from its initial launch at 49 basis
points over comparable Treasury yields.
Some market participants say there saw a surge in demand for
this issue on talk that Freddie may cancel its scheduled sale of
another benchmark note on Thursday. The mortgage company, however,
said it officially hasn't made an announcement on that yet.
The notes, with a coupon of 1.75%, were priced at 99.676 to
yield of 1.859%. The deal, with Barclays Capital, J.P. Morgan and
Banc of America Securities, is expected to settle Thursday.
With this, Freddie has issued $36 billion of reference notes
debt securities this year, and has approximately $259 billion of
these bonds and notes outstanding.
Meanwhile, risk premiums on most agency securities tightened
Tuesday morning.
The existing Freddie three-year note - 2.125% due 2012 - was
trading 0.5 basis points tighter at 34.5/31.5, according to
Tradeweb data.
-By Prabha Natarajan, Dow Jones Newswires, 201-938-5071;
prabha.natarajan@dowjones.com