Best of the Bond Market for June 25th, 2012
Distressed Debt Investing: Howard Marks on Distressed Debt
What do we, as distressed debt investors do, that gives us an advantage over most?
1) We never invest in companies where things are going well and investors are enthralled = we buy at lower prices
2) We invest after problems have already emerged = less chance of getting sideswiped by a business failure, earnings miss, etc
3) We buy from motivated or forced sellers = we have an advantage over the seller in the “zero sum” analogy.
BusinessWeek: Moody’s Defied as Banks Advance Among Investors
Every measure of risk in the credit markets shows the banks enjoy greater confidence among investors now than before Moody’s said the downgrades reflected a deteriorating outlook.
The Financial Lexicon: The Market Says Morgan Stanley is Junk
Perhaps, rather than spending their time attempting to spin the Moody’s downgrades as positive, analysts and the media would be better suited attempting to figure out why the corporate bond market is pricing the bonds of certain financial institutions as if the ratings need to come down even more.
Sober Look: The Market Wants More High Yield Bond Issuance
year-to-date we have about $19bn more in demand than in new supply. Corporate America continues to have access to cheap credit. But uneasy about increasing leverage and with limited investment opportunities companies are not issuing enough paper to satisfy the enormous appetite for fixed income product.
Benzinga: Under The Hood: An Unheralded Junk Play
With investors’ thirst for yield increasing, the dominance of HYG and JNK in the high-yield bond space has not served as a deterrent to ETF sponsors looking to introduce new junk bond funds. Rather, the success of those ETFs has prompted a spate of new high-yield bond fund introductions this year.
Economists View: A Long Wait to The …
