There is considerable demand for the bonds at 7bp-8bp sub-Libor, but bookrunners BNP Paribas, Lehman Brothers and Merrill Lynch are holding out for Libor less 9bp. Freddie Mac's dollar denominated three year Notes trade 10bp-11bp tighter at Libor less 20bp-21bp.
Freddie Mac price talk cheapens as book builds slowly
Price talk for Freddie Mac’s Eu5bn three year EuReference Note transaction, which is expected to price on Wednesday, has widened from Libor minus 10bp to minus 9bp, at the same Freddie Mac’s outstanding paper has widened out to minus 9bp. The cheapening has given a fillip to the bookbuilding process, which was not going as well as hoped.