Credit update September 9, 2013

Syria continues to capture much of the headline news as yays and nays for military action caused increased speculation. The silver lining is that perhaps QE taper will be lightened or even reversed depending on the nature of economic backlash from the war. Other seers have jumped in with similar opinions tied to housing and poor GDP growth.


Meanwhile, liquidity in markets continues to be abysmal and generates poor revenues – another broker, Pierpont, exited the market for HY market making.


But new issues came back with a bang, after the forced furlough from last week’s shortened attention. The health of the market was apparent; debt-laden Sprint was able to raise $6.5 billion to pay for CAPEX as well as Clearwire’s paper post the acquisition. In related telecom news, Verizon paid much more than expected for Vodafone’s stake in Verizon Wireless. To fund this, a new Verizon deal is expected that will re-price the entire telecom sector.


Have a great week ahead!



Investment grade +82 bps over swaps (couple better from last week but negative return YTD)

High yield – 6.3% yield to worst (still positive for the year +2.5%)


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