L.A. Buyer Unloads Raytheon, Cingular

Fixed-income investment firm Payden & Rygel recently lightened up its holdings of defense company Raytheon and sold its holdings of Cingular Wireless.

  • 03 Dec 2004
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Fixed-income investment firm Payden & Rygel recently lightened up its holdings of defense company Raytheon and sold its holdings of Cingular Wireless.

The manager, which runs $50 billion, prefers to look for value by specific names rather than investing in or selling off wholesale in industries, according to Will Hawley, U.S. investment-grade credit strategist for the Los Angeles-based firm. Hawley helps formulate strategy for the company's more than $10 billion in investment-grade credits.

While the defense sector has recently done well with a bulked up defense budget, Raytheon became too well bid, Hawley said. The firm also recently sold off its holdings of Cingular Wireless because it believes the merger with AT&T Wireless may be hard to pull off in an environment where subscribers can move but keep their numbers. This is proving to pose challenges for firms and their ability to retain customers, he said.

In addition, Hawley said he has liked the telecommunications, media and cable industries and thinks they will continue to outperform in the investment-grade sector.

P&R owns Comcast bonds and likes the cable sector because companies in it are well-positioned to cross-sell to their subscribers. "Instead of just adding subscribers, cable companies can sell services like voice over IP and streaming video," the strategist noted. Hawley said P&R owns Sprint and Viacom bonds, but declined to comment on their specific maturities or coupons.

The firm is continuing its strategy of investing in the lower end of investment grade against a backdrop favorable to taking credit risk, Hawley said.

The company uses a variety of benchmarks, most notably the Lehman Brothers Aggregate Bond Index and a short-term Merrill Lynch government/corporate index. Hawley noted he has a 5-10% overweight to credit relative to these benchmarks.

  • 03 Dec 2004

All International Bonds

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2 JPMorgan 230,914.50 1036 8.11%
3 Bank of America Merrill Lynch 221,389.46 762 7.78%
4 Goldman Sachs 171,499.26 554 6.03%
5 Barclays 169,046.60 646 5.94%

Bookrunners of All Syndicated Loans EMEA

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1 HSBC 25,935.16 104 7.16%
2 Deutsche Bank 25,125.19 81 6.94%
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4 BNP Paribas 19,315.94 110 5.34%
5 Credit Agricole CIB 18,706.93 106 5.17%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 12,578.87 55 8.17%
2 Citi 11,338.07 71 7.36%
3 UBS 10,682.06 44 6.93%
4 Goldman Sachs 10,419.53 53 6.76%
5 Morgan Stanley 10,194.88 57 6.62%