CSFB Plots Revenge Of The NERDS

  • 11 Mar 2001
Email a colleague
Request a PDF

Only in Bondland would NERDS mean Not Ever Really Dead Sectors. The revenge of the NERDS, in Credit Suisse First Boston research language, is the fact old economy businesses are providing more upside to investors than new economy bonds. "We always try to do something original with our research," says CSFB high-grade credit strategy head David Goldman, adding that he just got off the phone ordering propeller beanies with the CSFB logo for an upcoming conference. "Just think of them as high-tech yamulkes," he quips.

Old economy bonds, such as retail, basic industries and rails will outperform the rest of the high-grade market this quarter with 20 basis points of tightening against swap spreads on a 10-year basis, predicts Goldman. "We've seen the best performance in top name banks, but soon it will be overtaken by companies that these institutions lend to." As investors come to see that the risk associated with the old economy were exaggerated last year at the peak of the tech boom, they will begin rotating back into these bonds. "They've proved themselves more resilient," says Goldman, adding that according to his equity-driven credit valuation model, NERDS stocks remained unchanged while the rest of the market has been beaten up. "The risk associated with old economy stocks is down, and equity implied volatility is a leading factor of how the bonds will do," he adds.

  • 11 Mar 2001

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 7,026 25 11.95
2 Citi 6,449 21 10.96
3 BNP Paribas 5,093 18 8.66
4 Barclays 4,040 11 6.87
5 Lloyds Bank 3,615 14 6.15

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 13,091.24 36 12.23%
2 Bank of America Merrill Lynch 10,472.90 27 9.79%
3 Wells Fargo Securities 9,632.91 31 9.00%
4 JPMorgan 9,162.38 30 8.56%
5 Credit Suisse 4,676.43 10 4.37%