Wednesday, March 31, 2010

Junk debt ;Bond market recap

         Junk debt – somewhat cautious lead WSJ article - "The odds are increasing that corporate-bond gains may be limited from here, given the heights already reached, the government's reduced support and the risk of rising interest rates" (WSJ); according to Bloomberg, "Corporate bonds are rallying for the fourth straight quarter, the longest streak since 2004"    

         Bond market recap – from E Beinstein - Bond supply stands at $82B MTD on the last day of the month and quarter. YTD supply is $194B almost exactly matching the $196B issued in Q1 last year. Full year redemptions + coupons total $750B this year with ¼ of this equal to $187B so supply has been about balanced with the cash flow that holders of HG bonds have received from their positions.  On a sector level issuance has been very light YTD in Utilities, Telcoms, Technology, Basics, Cap goods and Consumer cyclicals.  The current pace of supply is slightly above the pace consistent with our $600B forecast for full year. 

1 comment:

  1. Good stuff..very interested in credit markets