NEW YORK Fannie Mae and Freddie Mac "federal agency" debt and mortgage-backed securities gained relative to U.S. government bonds on Monday after the Treasury and Federal Reserve announced plans to boost investor confidence in the companies.
Yield spread premiums on five-year unsecured debt of Fannie Mae, the largest provider of funding for U.S. residential mortgages, narrowed 6 basis points to about 74 basis points over Treasuries, according to GovPX/Garban-ICAP.
Agency and mortgage-backed securities outperformed interest-rate swaps.
Two-year swap spreads were quoted at 86.50 basis points, 1.25 basis points narrower than Friday. Ten-year swap spreads were 66.75 basis points, tighter by 1.75 basis points.
(Reporting by Al Yoon and Richard Leong; Editing by Tom Hals)