Minnesota Shop To Sell Treasuries

  • 09 Mar 2003
Email a colleague
Request a PDF

Wayne Schmidt, portfolio manager at Advantus Capital Management, will rotate 5% of the firm's $1.5 billion portfolio, or $75 million, from Treasuries into a combination of corporates and mortgage-backed securities. Schmidt plans this move over the next month, when he predicts the Treasury market will rally to a point where profit taking will make sense. He says that a war with Iraq will produce a flight-to-quality but that the rally will be short lived, as uncertainty will be resolved. His trigger for the move is when the 10-year Treasury drops to 3.25-3.50%. Last Tuesday, the 10-year Treasury had a 3.64% yield.

Schmidt says that he will liquidate intermediate Treasuries with a five- to 10-year maturity, as a rally will cause the curve to be steeper. With the proceeds, he will buy shorter duration MBS and corporates. He will use the rotation as a way to shorten duration in anticipation of higher interest rates looking forward. For instance, with the proceeds of 10-year Treasuries, he will buy seven- to eight-year corporates. With the five-year Treasuries, he will invest in two- to three-year corporate bonds.

Schmidt declined to indicate any particular name or sector for his future corporate purchases. He says he will buy investment-grade rated bonds only. As an example of a recent purchase, he bought the PHH Corp. 7.12% notes of '13 (BBB+/BBB+) at a 330 basis point spread over Treasuries. Last Tuesday, the notes were trading at a spread of 321 basis points over the curve. Schmidt does not plan to add to this position.

Advantus is based in Saint Paul, Minn. Schmidt allocates 48% to MBS, 32% to corporates, 14% to Treasuries and 6% to agencies. With a four-year duration, the fund is almost neutral to the Lehman Brothers aggregate index, which has a 4.10-year duration.

  • 09 Mar 2003

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 13 Mar 2017
1 JPMorgan 94,925.33 384 8.39%
2 Citi 87,531.58 331 7.74%
3 Bank of America Merrill Lynch 84,341.49 288 7.46%
4 Barclays 75,288.19 241 6.66%
5 Goldman Sachs 68,504.71 208 6.06%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 16 May 2017
1 Deutsche Bank 19,381.65 47 8.82%
2 Bank of America Merrill Lynch 18,968.25 36 8.63%
3 HSBC 18,103.95 50 8.24%
4 BNP Paribas 8,911.57 55 4.05%
5 SG Corporate & Investment Banking 8,885.00 54 4.04%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 23 May 2017
1 JPMorgan 8,714.26 35 8.36%
2 UBS 8,283.47 33 7.95%
3 Goldman Sachs 7,736.57 37 7.42%
4 Citi 6,897.11 46 6.62%
5 Bank of America Merrill Lynch 6,215.31 24 5.96%