FREDDIE MAC PRICES NEW $3 BILLION TWO-YEAR AND $4 BILLION 10-YEAR REFERENCE NOTES® SECURITIES
What does this all mean? What insights can we draw from this information? Here is the key line " The issue, CUSIP number 3134A4VD3, was priced at 99.967 to yield 4.018%, or 21.0 basis points more than two-year U.S. Treasury Notes" Why is this? It is at least partially explained by the extra risk associated with these Reference Notes.
McLean, VA – Freddie Mac (NYSE: FRE) announced today that it priced its new 4.00% $3 billion two-year USD Reference Notes® security due on August 17, 2007. The issue, CUSIP number 3134A4VD3, was priced at 99.967 to yield 4.018%, or 21.0 basis points more than two-year U.S. Treasury Notes.
Freddie Mac also announced that it priced its new 4.375% $4 billion 10-year USD Reference Notes security due on July 17, 2015. The issue, CUSIP number 3134A4VC5, was priced at 99.327 to yield 4.459%, or 33.5 basis points more than 10-year U.S. Treasury Notes. Both Reference Notes securities issues will settle on July 14, 2005.
Including today's new offerings, Freddie Mac has issued $26 billion of Reference Notes securities during 2005. Since the beginning of the year, approximately $23 billion of the company's Reference Notes securities have matured, leaving approximately $214 billion in Reference Notes and Reference Bonds® securities outstanding.
Note: I am no expert on the bond market, so if anyone else has more insights please post a comment