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TIAA-CREF will rotate 5-12% of its intermediate bond portfolio, or $270-648 million, from Treasury Inflation Protected Securities into mortgage-backed securities, corporates and nominal Treasuries, according to Lisa Black, managing director and portfolio manager. Black declined to be more specific on the firm's potential purchases, saying that future allocation has not yet been defined, but spread products such as corporates and MBS will be given priority for yield purpose.

Solus Investment Funds, which manages £3 billion in fixed-income assets, is looking to add Tussaud's Finance asset-backed securities to its Solus High-Yield Fixed-Interest fund, says Kevin Doran, fund manager. The planned purchase is part of Solus' strategy to build up its cyclical exposure. Tussaud's has exposure to consumer risk, but given the nature of the business, the long time it has been in operation, and its portfolio of well-trusted brands, the issue is defensive in nature, says Doran. Tussaud's Group securitized its tourist centers and amusement parks in 1999, and Doran is eyeing the single-A rated tranche that trades roughly 130 basis points over gilts.

Volatility in credit ratings, a fragile global economy, political insecurity as a result of the terrorist attacks of September 2001 and the fallout from the burst TMT bubble have combined to wreak havoc on the corporate community over the past year. In this climate, corporate refinancing solutions have practically become a mainstream banking product. October, Mark Twain observed, is one of the most dangerous months to invest in the stock market, the others being July, January, September, April, November, May, March, June, December, August and February.

For the auto sector's Big Three life in the capital markets has become a lot more difficult. Their funding strategies have come under intense scrutiny and their benchmark bonds are being used as cheap hedges by some investors. For the once stable sector, spread watching is now the name of the game. In the following three articles, Neil Day and Danielle Robinson report on the progress of US autos in the international bond markets.

Despite initial scepticism, in recent years the euro denominated bond market has evolved into a true rival to the dollar market in terms of supporting the funding efforts of the major automotive companies. But can the single currency retain its importance for these benchmark borrowers?

Christoforos Sardelis, director general of the Greek Public Debt Management Agency

Aziz Farrashi, director general, international finance and organisations, Bank Markazi Iran

Anne Leclercq, head of the Belgian Debt Agency front office, and Baudouin Richard, chairman of the executive committee and chairman of the board, MTS Associated Markets

Should Europe adopt US bankruptcy laws? This is one of the debates that is being increasingly aired by banks and corporates across Europe. A growing view is that companies have a better chance of getting themselves out of the mire if they are based in the US than in Europe. However, others argue that it is not so much the adoption of US bankruptcy laws that needs to take place in Europe: it is the attitude towards bankruptcy that needs to change. It is a fact almost universally acknowledged that corporates that have fallen on hard times have a much better chance of successful rehabilitation if they are based in the US than in Europe. "I think the US does have a more adaptable approach to restructuring than Europe," says David Kirshenbaum, managing director, European investment bank at Citigroup/SSSB in London. "The US process is simpler to navigate through and gives all constituencies more time to restructure companies and to maintain them as going concerns often with the same management in place."

Zeti Akhtar Aziz, governor of Bank Negara Malaysia

Fallen and flaming angels, distressed debt, falling knives - sadly, these are the new buzzwords of the high yield market, and they are not the kind of phrases that the European market pioneers had in mind when the asset class was born five years ago. They might be more comfortable with the jargon of CDOs, disclosure and rising stars. But can these more positive trends counter the negativity and persuade investors to get back into the game? The structure and character of the European high yield market today is not quite what its champions had in mind when it sprang to life at the end of the 1990s. Then, the expectation was that the launch of the market signalled the arrival of a new asset class characterised by exciting growth stories and LBOs offering chunky long term returns. Nobody, of course, was naive enough to imagine that this would be a default-free market...

Giampiero Atonelli, head of finance