This Week in Corporate Finance (10/12/12)

 In this holiday-shortened week, the financial markets continued to fret about the lack-luster pace of economic growth. The short-end of the market was basically unchanged, while the further out one went on the maturity curve, the greater the impact was.

For the week, the US 2-year Treasury note yield was unchanged at 26bps; the 5-year note was down -1bp 66bps; the 10-year note was down -6bps 1.67%; and the 30-year bond was down -11bps to 2.86%.

In Germany, there was basically no movement in the Bund market as the 30-year Bund yield was -3bps lower, falling to 2.34%; the 10-year Bund fell -2bps to 1.50%; and the 2-year Bund fell by -1bp to 5bp. The 10-year French Oat witnessed a bit of a rally as its yield fell -10bps to 2.19%.

It was a quiet week in Italy, as their 10-year bond was better, but only by -3bps, settling at 5.02%. Things were a little weaker this week in Spain, but not terribly so. The Spanish 10-year bond was weaker by +7bps, to finish the week at 5.76%. It didn’t help Spain that S&P cut their credit rating by two notches to BBB-.

Yields were a bit better in Portugal as their 10-year bond fell by -10bps to close the week at 8.12%. It was even a quiet week in Greece, as their 10-year bond continued to improve but to a smaller degree this week. Their 10-year bond yield was -15bps better, falling to 18.32%.

Issuers continue to find plenty of investor appetite for their bonds. Mizuho came to the market with a $2.5 billion two-tranche deal comprised of $1.5 billion of a 5-year note and $1.0 billion of a 10-year note.

The market will be looking forward to the two-day FOMC later this month on October 23^rd & 24^th.

I’m looking forward to seeing many of you this week at AFP’s Annual Conference in Miami Beach.