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Breakingviews: Safety dance in debt markets

Friday, Feb 22, 2013 - 03:26

Feb 22 - Jeffrey Goldfarb talks to Agnes T. Crane about how investment-grade corporate bonds are no longer the haven they once were.

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King has been thrown that is speaking of debt or the would be king day. Had been that sovereign issue notes were sort of a safe haven but then amid the crisis investment grade paper became the go to spot. Now that's being. -- off its perks. The tough plays out. Against the emergence of a change. Over the last few years people think just looking for places writer need to worry about headline risk and don't need to worry about -- default on it so that it. Please used to be sovereign sovereign but their injuries happen and it happened. And the United States -- AAA anymore where I've got some investors who have seen in the investment grade corporate value in the US in particular. Issuers like my -- -- And it's credit -- do some funny things but nothing and it isn't it maybe meet tonight at the same kind of headline that we. Coming out of here lost -- But what's changing now it's -- everybody's got kind of comfortable. You know yields have been following. President -- and now all of a sudden. Seeing emergence. -- details now again that that impacts of these particular investors because. You know private equity firms or other people looking at that point where Berkshire -- -- that debt and they got -- one more exact. Am looking exactly for those companies that are safe from that cash that are -- a lot of companies that -- team saved through the -- because it was sort of keeping their cast. I'm doing anything that only really achieve and now those companies have become targets again like products like Dell that all the sudden it's like. Investors have to start looking okay where I thought it safe there's a couples line. Tangible items possibly have a -- and that's our and that's the other is that you know yields are have been rising any kind of you hit a -- it but again eventually we're gonna see yields continue to rise and that's another issue because that all hit on it. -- -- one of these things where -- again people have been looking for. You see the risk free areas you know I get it reminder that that instantly -- It was not for long stretches in there obviously periods where this was a nice place to be exact but. I've got to pack up and move and it's unclear -- -- -- the question always because of these are always relative frightening. Treasuries relative to our US treasury that is relevant or -- still sick. Some of his corporate warming so but there's obviously at risk we hear means so now where are people think if there're -- -- Yes and that's and people are trying to figure out what it's like in the last crisis -- it is that it would go. We're -- big banks because they won't be you know are -- need to worry about that but that's kind of off the table. Another place you would look forward by debt that had come back covenants that would -- there was a takeover you'd be paid out of that -- work and that doesn't work any more either because. Because the bonds are worth so much now that you're still gonna lose money even if you paid that's like. I think what's happening in the market shift going popular enough to find nuclear trying to sign where where can I go where -- feel comfortable. -- will keep dialed that then they'll be back more breaking news next week.

Breakingviews: Safety dance in debt markets

Friday, Feb 22, 2013 - 03:26

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