Search results for

Under intense scrutiny from all corners, Enron employees are hoping something will come along and take the white hot spot off the company. One banker who spoke to a colleague at Enron recently said his friend noted that everyone at the company is "hoping they catch Bin Laden" to take the heat off of Enron.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Joe Zarr, portfolio manager with Meeder Financial, will increase the firm's Treasury bond duration from 2.0 years to 6.5 years if the 10-year Treasury yield rallies to a 4.90% target yield. As of last Monday, the 10-year Treasury was yielding 5.09%. He plans on moving the entire Treasury allocation--currently 90% of the portfolio, or $180 million-- reasoning that conditions will be there for a sustainable Treasury rally, but declined to specify what would spur this rally.

Credit Suisse Asset Management, which manages €7.5 billion in European fixed-income assets from its London office, has taken profits on telco, auto and cyclical paper to make room for new issuance.John de Garis, head of CSAM's European fixed-income team in London, declined to detail the credits he sold.

Chelsea Management Co. is looking to swap out of $30-$50 million in U.S. agency debentures with maturities of over 10 years that are callable in two- to three-years, in order to purchase similar-yielding agencies with maturities of less than 10 years. Tom Techentin, portfolio manager of $375 million in taxable fixed-income, says what he believes is a rising interest rate environment diminishes the value of the longer duration paper. Chelsea will look to swap bonds of a wide variety of agencies, but some examples include Federal Home Loan Bank 6.75% debentures of '16 and 6.5% debentures of '16. The firm will also look to sell Federal National Mortgage Association 6.37% debentures of '14, says Techentin.

Investors and analysts are beginning to wonder for how long the sterling corporate bond market can sustain its rally in light of recent negative credit events, such as the Enron bankruptcy. "This has been an incredible rally. But you have to ask when it is going to stop. We've seen a huge sovereign default [Argentina] and several corporate defaults. If this continues, we are going to see fundamentals deteriorate rapidly," argues Andrew Burton, credit analyst in the Royal Bank of Scotland's financial markets division in London.

A survey conducted by New York based fixed-income recruiter Anastasia Carroll, based on responses from bond executives at 56 buy- and sell-side firms, concludes that the strongest job demand is likely to be for those versed in structured finance and debt origination this year. Perhaps most importantly to bond market players, the majority of respondents are looking to use the balance of the first quarter to build up their departments. She speculates that this will be easy, given the amount of dislocation still prevalent after the spate of mergers in 2000.

Cleveland-based LESCO, a provider of products for the professional turf-care market, has refinanced its debt and secured a $122 million asset-based credit with PNC Bank. "LESCO was in violation of covenants on the old agreement and had forebearance through March," said Breck Denny, cfo of LESCO. "The lousy economy and Sept. 11 caused LESCO to violate," he said. "The primary culprit was a fixed-charge ratio." The company has been working since October to solve the problem with the existing deal, he added.

Investment grade issuance for January came in at $55.5 billion, which was at the high end of analysts' estimates. Supply has been primarily concentrated in higher quality names, with AAA and AA borrowers accounting for over 2/5 of year-to-date issuance. Lower-rated borrowers have disappeared from the calendar in the past two weeks as post-Enron accounting concerns have increased spread volatility significantly in the BBB ratings bucket. The roller-coaster ride in Tyco spreads and the sell-off in Williams, WorldCom and other affected credits deterred any but the highest rated issuers from accessing the markets. That said, prior to the last two weeks the high yield calendar was very robust, with almost $9 billion in junk-rated issuers tapping the market. The Investment Company Institute released its preliminary figures for 2001 flows, which came in roughly in line with expectations. For the first time since 1998, flows into taxable fixed income bond funds exceeded flows into stock funds. The total for bonds for the year was about $75 billion compared with $33 billion for equities.

Investment grade issuance for January came in at $55.5 billion, which was at the high end of analysts' estimates. Supply has been primarily concentrated in higher quality names, with AAA and AA borrowers accounting for over 2/5 of year-to-date issuance. Lower-rated borrowers have disappeared from the calendar in the past two weeks as post-Enron accounting concerns have increased spread volatility significantly in the BBB ratings bucket. The roller-coaster ride in Tyco spreads and the sell-off in Williams, WorldCom and other affected credits deterred any but the highest rated issuers from accessing the markets. That said, prior to the last two weeks the high yield calendar was very robust, with almost $9 billion in junk-rated issuers tapping the market. The Investment Company Institute released its preliminary figures for 2001 flows, which came in roughly in line with expectations. For the first time since 1998, flows into taxable fixed income bond funds exceeded flows into stock funds. The total for bonds for the year was about $75 billion compared with $33 billion for equities.

Banc of America Securities will be talking to investors this week preparing the groundwork for the $275 million credit backing Accredo Health's $415 million purchase of the specialty pharmaceutical division of Gentiva Health Services. Buysiders believe the paper will be very desirable, as it falls into a hot sector. In addition to the sector being highly attractive, slow new issuance has left investors scrambling for allocations on certain choice deals this year.

Citigroup's project finance team is attempting to organize key project finance lenders into pooling portfolio data to present to the Basel Committee this month to prove to the Swiss-based body that project loans have significantly higher recovery rates than those on corporate loans. "The accords may be five years away, but the earlier you start, the more of a jump you have on the situation," said one project finance banker, noting, "clients and banks should be worried. If they [The Models Task Force] rate the project finance loans as junk, the pricing will go through the roof," he added.