Agencies finished 2006 on a positive note with gross issuance up by 8% in December, according to Citigroup Global Markets analysts.

Even with the holiday-shortened week between Christmas and the New Year, agency gross issuance increased 8% to $78 billion in December from $73 billion in November, they said. The rise is a result of a 12% jump in 30-year fixed-rate issuance. In other markets, Citigroup said that 15-year fixed-rate issuance was flat, other fixed-rate issuance (20-year and IOs) rose less than a billion, while ARM issuance dropped by 15% to under $10 billion. ARM issuance in December made up merely 12% of total issuance, which is the lowest figure since April, Citi analysts reported.

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