. . . .On the five, I bet 2.4% yield; actual was 2.3% (10 bips difference):
Per Reuters —
BORROWER: MERCK & CO INC
AMT $850 MLN | COUPON 2.25 PCT
YIELD | 2.30 PCT
I was low — BUT ONLY BY 11.1 bips(!) — on the ten year paper, guessing 3.8% yield; actual was 3.911% — Viz:
AMT $1.15 BLN | COUPON 3.875 PCT
YIELD 3.911 PCT
SETTLEMENT 12/10/2010. . . .
Always a fun parlor game. Watch for a small downbeat in Merck common stock tomorrow, as the NYSE traders realize that CFO Peter Kellog just decided to “hedge” a bad outcome in the J&J arbitration, today — prefunding about $2 billion of maturities — at very low coupons, and even lower spreads v. Treasuries.
CFO Kellog is the Merck financial “insiders’ insider” — and it is significant that he effectively prefunded $2 billion, today.
[Still, I shouldn’t quit my day job, as that 10 bips is about $250,000 in additional interest, per quarter. On the other hand, what’s a quarter million, on $2 billion? Not much.]