Bonds & Stocks Let Know Two Different Tales

New York, April 5 (FinanceEnquiry.com) – Bonds and stocks have been reporting two dissimilar news over the past more than a few months, and it seems that the argument for extended slower expansion is winning. That, for sure, would have connections with bond investors, who, rather than escaping fixed income...

On Development and Debt Apprehensions, European Shares and the Euro Fall

New York, October 10 (FinanceEnquiry.com) – At the same time as economic apprehension was mixed by stumbling growth in the combat of euro zone in opposition to its debt catastrophe making the euro, Spanish bond and Italian bonds to come under new pressure, today, European shares skidded for the third day...

ECB Rate Cut Leads to Dip in German Two-year Yields

New York, July 6 (FinanceEnquiry.com) -  After the European Central Bank (ECB) had cut its deposit rate to zero, German two-year yields witnessed a dip for the first time since June as speculations over ECB policy measures began to rise. The ECB had cut its interest rates to record low 0.75 percent, but...

Credit Conditions and Default Outlook – Fitch

New York, June 19 (FinanceEnquiry.com) – Fitch’s Managing Director Mariarosa Verde and Senior Director Eric Rosenthal made a presentation on the credit conditions and default outlook at NYSSA 22nd Annual High Yield Bond Conference. Here’s what they have to say! The default rate was...

McDonald Bonds Preferred Over IBM

New York, May 24,2012 (Finance Enquiry) – McDonald, (NYSE: MCD) the large fast food chain has outperformed the best in the bond market even as the stock value is fallen by 8% this year owing to declining sales growth. The investment grade  bonds with a seven year maturity was paid $400 million by...

Value in Leveraged Loan CLO junior class A bonds

Value in Leveraged Loan CLO junior class A bonds With yields of ca. 5% and above, we argue on a generic basis that junior Class A’s offer sufficient protection against defaults while offering a good pickup (ca. 150 bp) over senior Class A bonds. We think investors should consider switching to junior...

Principal Resilience of Junior Class A Bonds – Deutsche Bank Securities

Principal Resilience of Junior Class A Bonds – Deutsche Bank Securities Credit enhancement in junior Class A is sufficient to withstand a stressed default scenario Outliers excluded, junior Class A attachment points can range anywhere between 35% to 16% and stand at ca. 31% on average. Comparing junior...

Junior Class A Bonds – A Closer Look

What are junior Class A bonds? About 75 European leveraged loan CLOs currently have junior Class A bonds totalling EUR 3.32 billion by volume outstanding, with about 24% of deals having junior Class A bonds (Figure 8). Fifty seven of these deals have two tier senior bonds – a senior/junior only...

Deutsche Bank Research – Agency Bonds

We discuss the risks and advantages of yield “enhancement” over GSE bullets in several categories of spread product paper, including callables, covered bonds, supranational and foreign agencies. Our current preferred avenue for yield pickup over GSE bullets is via USD denominated German...

Long Treasury STRIPS offer nice yield pickup over LIBOR

One way to enhance yield income in the current low rate environment is to consider long end Treasury STRIPS. STRIPS in ten-year+ offer a yield pickup over LIBOR. For example, 2031 TINTs trade with an asset swap spread around 28bp. 2037 to 2041 TINTs have asset swap spreads near 40bp. Investors should...

Yield Enhancement Trade Ideas – Deutsche Bank Securities

Yield enhancement trade ideas Treasury STRIPS asset swaps One way to enhance yield income in the current low rate environment is to consider long end Treasury STRIPS. STRIPS in ten-year+ offer a yield pickup over LIBOR. For example, 2031 TINTs trade with an asset swap spread around 28bp. 2037 to 2041 TINTs...

US Fixed Income Overview – Deutsche Bank Securities

We expect yields to continue to grind lower. While the fall in claims suggests progress in the labor market is ongoing, we think the probability of a private sector adjustment to offset the fiscal cliff is very low. The looming cliff hasn’t yet made the front burner of the political dialogue. Formation...