| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Goldman Long Bond Shows Inflation Concern Wanes: Credit Markets |
Bloomberg - Jan. 24, 2011 - By Sapna Maheshwari
Goldman Sachs Group Inc.’s first sale of 30-year bonds in more than three years signals waning investor concern that inflation is accelerating. The debt soared in its first full day of trading.
The fifth-biggest U.S. bank by assets received $9 billion in orders for its $2.5 billion of notes sold on Jan. 21, according to Mizuho Securities USA. The 6.25 percent senior bonds priced to yield 170 basis points more than similar- maturity Treasuries, at the low end of a 5-basis-point range marketed by the firm, data compiled by Bloomberg show.
Economists are lowering forecasts for consumer price rises next year, with the median estimate declining to 1.9 percent this month from 2 percent in December, according to a Bloomberg survey. The record $13 billion auction of 10-year Treasury Inflation-Protected Securities on Jan. 20 attracted lower-than- average demand and the difference between yields on 10-year notes and TIPS narrowed the most since May.
“People aren’t too worried about inflation,” said Anthony Valeri, market strategist with LPL Financial Corp. in San Diego, which oversees $293 billion. “Goldman was noticing there’s some demand here and they could get that deal done.”
Thirty-year Treasuries yield 307 basis points, or 3.07 percentage points, more than the consumer price index, above the average of 238 basis points since the start of 2000. Goldman Sachs predicts a 0.6 percent increase in personal consumption expenditures this year, compared with the median 1.05 percent of 59 economists surveyed by Bloomberg.
The Goldman Sachs bonds rose 2.49 cents to 102.11 cents on the dollar from their issue price as of 11:20 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Default Swaps Fall
Elsewhere in credit markets, the cost of protecting U.S. corporate bonds from default fell to the lowest in more than a year.
The Markit CDX North America Investment Grade Index, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, decreased 1.16 basis points to a mid-price of 81.7 basis points as of 11:29 a.m. in New York, according to Markit Group Ltd.
The index, which typically declines as investor confidence improves and rises as it deteriorates, is at the lowest since reaching 80.3 basis points on Jan. 14, 2010.
Credit swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.
Ford, AmeriCredit
Anheuser-Busch InBev NV, the world’s biggest brewer, plans to sell at least $1 billion of debt as soon as today in its first U.S. dollar-denominated offer in 10 months.
The company plans to sell $500 million each of 5- and 10- year notes and an unspecified amount of 3-year floating-rate debt, according to a person familiar with the transaction. Proceeds will be used for general corporate purposes, the Leuven, Belgium-based company said today in a regulatory filing that didn’t include the sale’s size, timing or maturities.
Ford Motor Co. plans to sell $1.137 billion of bonds tied to automobile debt and AmeriCredit Financial Services is marketing $800 million of the securities, according to a people familiar with those offerings.
Goldman Sachs’s last benchmark-sized offering of 30-year dollar-denominated bonds was in September 2007, Bloomberg data show. New York-based Goldman Sachs, the most profitable securities firm in Wall Street history, then issued $2.5 billion of 6.75 percent debt at a 190 basis-point spread, Bloomberg data show. Benchmark sales are typically at least $500 million.
‘Satiate’ Demand
“With Goldman Sachs doing a 30-year, it allows them to satiate some of the demand in the 30-year part of the curve and gets them close to all the buyers that are knocking on their door for bonds with duration,” said Timothy Cox, an executive director of debt capital markets at Mizuho in New York.
Goldman Sachs sold the bonds after reporting on Jan. 19 that fourth-quarter net income dropped 52 percent as a slowdown in trading and investment banking reduced revenue.
It may have offered the long-maturity debt to get ahead of an increase in borrowing costs, said LPL’s Valeri. Yields on 30- year Treasuries climbed last week to 4.61 percent, the highest since April.
“They’re probably saying, ‘Look, this 30-year’s still not performing well, it’s bumping along in terms of price, let’s get this debt done now before interest rates get higher,’” Valeri said. “As an investor you’re being compensated more to stand out on the yield curve. You’re getting more yield for extending the maturity.”
‘Buckets’ to Fill
Michael DuVally, a spokesman for Goldman Sachs, said the firm doesn’t comment on its own deals.
Including Goldman Sachs’s offering, companies have issued $5.32 billion of 30-year debt in dollars this month, up from $1.5 billion in December, Bloomberg data show. That compares with an $8.86 billion average in the first 11 months of 2010.
For the complete article visit Bloomber.com
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