Nokia paper hit as downgrade feeds maelstrom

Non-Investment Grade –

Sallie Mae (SLMA) – For a second day paper issued by education-funding and student loan originator Sallie Mae was active in the secondary market. Traded volume on Tuesday morning of $15mm was around half of that of Monday. Since mid-January the paper has outpaced an index of three-to-five year government treasuries by 3.70% while recent volume patterns suggest that investors continue to find value in Sallie’s paper even as bond prices come off. The paper carries a mid-yield at 5.19% on Tuesday.

Anadarko Petroleum Corp. (APC) – Once again the pattern of heavier trading is showing up volume of Anadarko’s secondary paper. On half of the last 12 trading days volume has exceeded $25mm with today’s volume currently standing at $8mm making it the third most actively traded non-investment grade paper. Investors once again advanced prices sending the issue higher by 40cents per $1,000 invested allowing the yield on its September 2017 issue to decline to 3.77%.

Muni-Bond Corner -

Thirty-day visible supply has almost doubled to $9.9 billion from a recent low of $5.2 billion at the end of May. Supply in the market for municipal bonds has had a direct impact on the direction of yields. The recent drop-off in issuance has allowed yields to trade lower along with the broader government securities market. Year-to-date issuance has been tepid as states get their budgets in line but with many states’ fiscal years beginning next month this should add to issuance in the second half of the year.

Andrew Wilkinson is a Senior Market Analyst at Interactive Brokers LLC

Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.

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About the Author
Andrew Wilkinson

Andrew is a seasoned trader and commentator of global financial markets. He worked for several London-based banks trading cash and derivatives before moving to the U.S. to attend graduate school. Andrew re-joins Interactive Brokers following a two-year stretch at a major Wall Street broker-dealer as their Chief Economic Strategist. His coverage of stocks, options, futures, forex and bonds regularly surfaces in global media, and over the last several years Andrew has made many TV appearances on Bloomberg, BBC, CNBC and BNN and Yahoo Finance.

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