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FHLB prices $3 billion three-year global, bond oversubscribed
By Lisa Kerner
Charlotte, N.C., March 4 - Federal Home Loan Banks said it priced its $3 billion three-year global bond on Wednesday at 89 basis points over three-year Treasuries.
Demand for the bond was "robust," an FHLB spokesperson said, noting that it was the agency's first three-year global since August 2008.
"The bond was substantially oversold in just a few hours, and, as in recent issues, there were numerous first-time global investors," the spokesperson added.
One trader heard the global saw a book of $4.5 billion.
The new bonds were at 89 bps bid, 88.5 bps offered at Wednesday's close, a trader said.
The 2.25% bond, which matures April 13, 2012, priced at 99.900 to yield 2.284%.
Demographically, the bond sold primarily in the United States, which took 80%, followed by Asia with 5% and Europe at 3%, according to preliminary data from FHLB.
Fund managers led the way among investors, accounting for 70% of the total, followed by financial institutions at 10%. Insurance/pension funds and central banks each accounted for 7%.
Barclays, Credit Suisse and Deutsche Bank were the lead managers. The syndication team includes 10 co-managers and a distribution group.
Looking at spreads, one trader called Wednesday a "pretty darn good day."
Even with the $3 billion supply courtesy of the FHLB, performance in the three-year sector was "mixed" overall but ended in by about 1 bp, the source said.
The five-year sector was in about 1.5 bps, with the two-year also in at about 1 basis point, according to the source.
But in general spreads were wider across the curve on Wednesday, said a source.
The 10-year sector was out about 1.5 basis points.
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