Tennessee Investor To Rotate Into Govvies

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  • 23 Jun 2003
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Martin & Co. is looking to gradually build up its allocation to U.S. Treasury securities as it scales out of agency debentures. Agency spreads are extremely tight to Treasuries on a historical basis and have little room left to run, argues Michael Holt, portfolio manager of the firm's $1.4 billion in taxable fixed-income. Holt says the firm could move 5%, or $70 million, into Treasuries if agency spreads show further tightening as investors gain confidence that the giant mortgage lenders are addressing governance issues and will grow less aggressively, which would likely mean less debt issuance.

Signs of a growing government deficit could also drive spreads tighter as Treasuries back up, Holt says. If spreads tighten by as much as 10-15 basis points, Holt could move a total of 15%, or $210 million, out of agencies and into Treasuries. Ten-year agencies were trading 33-35 basis points over Treasuries last Monday, or about 5-8 basis points wider than they were ahead of Freddie Mac's recent shakeup of top management.

Concerns over the recent management shakeup at Freddie Mac led Martin & Co. to move some $70 million out of Freddie Mac debentures and into Treasuries. Holt says continued negative headlines could also cause Martin & Co. to reduce its agency allocation. If, on the other hand, spreads remain where they were last Monday, Martin & Co. would likely stand pat, Holt says. In any event, the trades would be duration neutral, across a range of maturities.

At a duration of 3.0 years, the Knoxville, Tenn., money manager is short its bogey, the 3.7-year Lehman Brothers Intermediate Government/Credit index. It allocates 50% to agencies, 45% to corporates, and 5% to Treasuries.

  • 23 Jun 2003

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 35,941.13 111 8.93%
2 Barclays 31,588.47 86 7.85%
3 JPMorgan 27,799.55 107 6.91%
4 Bank of America Merrill Lynch 27,706.86 75 6.88%
5 HSBC 21,949.38 82 5.45%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 Commerzbank Group 114.00 1 66.16%
2 CaixaBank 37.05 1 21.50%
3 UniCredit 10.62 1 6.17%
3 BNP Paribas 10.62 1 6.17%
Subtotal 172.30 3 100.00%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 SG Corporate & Investment Banking 770.06 2 16.80%
2 Goldman Sachs 656.16 2 14.32%
3 JPMorgan 527.28 4 11.50%
4 Emirates NBD PJSC 408.38 1 8.91%
5 Deutsche Bank 321.53 3 7.01%