Fixed Income

Chicago’s Rating Splits Agencies

 |  Friday, 02 October 2015 00:00  |  Published in Fixed Income
Chicago’s Rating Splits Agencies
(Chicago) Chicago is a vexing city, at least from a debt investors’ perspective. The city has garnered huge headlines for its budget and debt woes, but very curiously, two premier ratings agencies diverge sharply over its creditworthiness. If you listened to Moody’s, who rates almost all of the city’s various debt as junk, then you would think Chicago is headed for bankruptcy tomorrow. However, Standard & Poors gives top ratings to some Chicago debt, and generally has a more positive outlook on the city. The disagreement seems to stem from the city’s complicated legal structure and bankruptcy laws, as it…

Weinstein Case Highlights Risk of Bond Illiquidity

 |  Tuesday, 29 September 2015 00:00  |  Published in Fixed Income
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Weinstein Case Highlights Risk of Bond Illiquidity
(New York) Boaz Weinstein, the well-known hedge fund manager, is in the midst of a court case with a former institutional investor in Canada, the Public Sector Pension Investment Board of Canada. The Pension Investment Board requested a large portion of money back from Weinstein’s fund earlier this year after a string of losses. Weinstein asked them to accept the funds paid back in smaller increments over time, but the Pension Investment Board requested it come in one installment. Thus, Weinstein organized an auction of his illiquid bond holdings, which subsequently sold at discounted valuations. The Pension Investment Board is…

Junk Bond Yields Hit Highs as Investors Exit

 |  Monday, 28 September 2015 00:00  |  Published in Fixed Income
Junk Bond Yields Hit Highs as Investors Exit
(New York) Junk bond yields have been jumping as investors pull out of the space. According to Bloomberg, yields for junk bonds are now at 8.01%. That level has only been surpassed once—last month—in the past four years. The drop has been led by energy bonds, which have been badly wounded alongside the decline in commodity prices. Despite all the gloom, some are bullish on junk bonds, with PIMCO’s CIO for global credit saying “We view the credit market as attractive, given our outlook for supportive economic growth and low defaults … Any credit spread widening or market volatility that…

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