Fannie Mae prices $1 billion add-on to 1.25% notes due 2016; five-year spreads widen on news

By Lisa Kerner

Charlotte, N.C., Sept. 19 - Agency spreads widened in the five-year sector on Monday after Fannie Mae reopened its $1 billion 1.25% benchmark notes due Sept. 28, 2016, according to a trader.

Fannie Mae announced that the notes, $4 billion of which are currently outstanding, priced at 100.369 at auction to yield 1.174%.

The reopening caught many by surprise, the trader said, since Fannie Mae is expected to announce a new two- or three-year note on Thursday.

Other than the Fannie Mae announcement, Monday was quiet, said the trader.

Economic uncertainty in Greece "is all we have to trade on right now," he said. There is concern that the country is on the verge of defaulting on its debt.

When things are uncertain, like on Monday, stocks are down and spreads are wider, the trader noted.

"It is becoming tedious hoping for some sort of solution," the trader said of the economic situation overseas. "The market is not doing a good job of facing the music."

According to the trader, there is not a lot of credit risk in agencies right now, which are trading in a market directional basis and tracking swaps.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.