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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: reaper who wrote (165092)	5/10/2002 3:28:52 PM
From: robnhood	Read Replies (1) \| Respond to of 436258

<<-- =DJ High-Grade Corp. Bond -3: `Signs Of A Credit Crunch' -- Reliant's cancelation follows a similar pattern last week, when three issuers pulled deals. Supply for last week was also one of the lowest of the year at $6.2 billion, as calculated by Thomson. Petrobras Brasileiro, the Brazilian state-owned oil company, postponed a $300 to $400 million deal and retailer The Limited of Columbus, Ohio, pulled a $300 million issue. And the Countrywide Home Loans unit of Countrywide Credit Industries canceled a $500 million because, according to an underwriting official, the company wasn't happy with the projected cost needed to complete the transaction. "We are seeing signs of a credit crunch in that investors don't want to extend their exposure to new issues," said Michael Kastner, head of taxable fixed income at Deutsche Bank Private Banking in New York. He said that with many corporations looking to term out their short term debt, a backlog in supply could potentially be building. As for an investing strategy, he said he's looking for volatility in the corporate bond market, and in particular, the telecom sector, to settle down before he establishes new positions. "We need to see more corporate disclosure and a positive tone emerge for the sector," Kastner said. Many investors got burned by the incredible descent of WorldCom Inc.'s (WCOM) bonds earlier this month. Its 7.50% issue due 2011, part of a record $11.8 billion issue which priced a year ago, dropped as low as 42 cents on the dollar last week from a new issue level of just under par. They were quoted Friday afternoon at 45, a day after Moody's downgraded the debt three notches to a speculative Ba2 from Baa2. The company has been hurt by a decline in its core phone and data business and by an investigation by the Securities and Exchange Commission into its accounting practices. The selling spread to the rest of the investment-grade telecom sector, especially AT&T Corp. (T), which saw its bonds sink as low as 82-cents on the dollar last week from 96-cents. Meanwhile, brokerage bonds were tanking as Merrill Lynch & Co. (MER) tried to settle conflict-of-interest charges with New York State Attorney General Eliot L. Spitzer regarding the hyping of certain stocks. Yield margins, for example, on Morgan Stanley's (MWD) 6.60% issue due 2012, which priced two months ago at a yield margin of 1.35 percentage points over Treasurys, moved out nearly 0.20 percentage point in the first two weeks of May alone. "The corporate bond market is still suffering from concerns about credit quality and that will persist until there is evidence that corporate profits and cash flows have definitively rebounded from the slump of the last year and a half," added Moody's Puchalla. The corporate market has shown some signs of strength, however. Yield margins in the secondary market have been tightening up over the past couple of months, said Puchalla, in anticipation of a bottoming out of the credit cycle and an economic recovery. But much of the tightening is due to the very wide spreads-to-Treasurys already in the market, he added. Year-to-date, investment-grade corporate bond returns have been unchanged, compared with a 1.2% return in the Treasurys market, according to Moody's. Last year, corporates returned 10.9% compared with 4.6% in Treasurys. >>

To: reaper who wrote (165092)	5/10/2002 3:31:47 PM
From: NOW	Respond to of 436258

but before this is all over, you will wish you had... <before anybody asks, i did NOT apply the $100k to add to my ACF short>