I did not get the BP Yankee bonds tipped today at $95 as per my bid. The marketmaker wanted a huge spread even though I was prepared to pay for 20 bonds. The offer was at $95.725 meaning the yield to maturity would only be 5.86% compared to 6.818% for the same paper reported in Tuesday’s Barron’s.
There is much mindless optimism over BP’s ability to cap the oil-spewing underground gusher. Then there are reports that the Deepwater Horizon oil is lighter than previously reported and therefore more of it is evaporating (ruining the air Gulf Coast folks breath but not killing fish and birds, plus crayfish, shrimp, oysters and other non-Kosher seafood).
Moreover the British oil major is rumored to be in talks with sovereign wealth funds around the Arab world.
Finally, the corporate bond market went up generally today after three bond issues commanded healthy orderbooks. When bonds go up the yield goes down, remember.
Tomorrow Martin Ferera, our Canada reporter (an expert in recherche and raunchy clerihews) will come up with another way to play black gold for yield.
