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A Bond Market Twist

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November 07, 2012 – Comments (2)

The WSJ is reporting (may require subscription) that some ExxonMobil and Johnson & Johnson bonds are trading at a lower yield than comparable treasuries.

Bonds of Exxon coming due in 13 months were quoted on Tuesday at 0.01 percentage point less than the comparable Treasury, according to Benchmark Solutions, a pricing service. Bonds of Johnson & Johnson due in May 2014 also recently traded at 0.01 percentage point less than Treasurys.

Of course, XOM and JNJ sport something treasuries lost a while back, AAA credit ratings.

No postion in XOM or JNJ.


2 Comments – Post Your Own

#1) On November 11, 2012 at 2:36 AM, ikkyu2 (99.39) wrote:

Treasuries sport something XOM and JNJ lack - the U.S. Mint.

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#2) On November 11, 2012 at 9:12 AM, rd80 (98.69) wrote:

The mint and the fed.

T's also have risk of a debt ceiling debacle disrupting payments.  Risk is very low and I'm sure bondholders would be made whole, but the risk is there.

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