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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (22084)	1/24/2005 4:51:03 PM
From: ild	Read Replies (1) \| Respond to of 116555

NEW YORK (Dow Jones)--Auto bonds rallied sharply Monday after financial services firm Lehman Brothers (LEH) said it will change the way it calculates the ratings of companies whose bonds are included in its benchmark indexes. Lehman plans to add Fitch Ratings to its basket of rating agencies from July 1, and it will use the middle rating from the three ratings agencies Moody's Investors Service, Standard & Poor's and Fitch when assigning issuers ratings. Currently Lehman uses the lower of the two ratings assigned by Standard & Poor's and Moody's to determine whether to include an issuer's bonds in its indexes. The inclusion of Fitch ratings will bring some respite - at least in the short-term - to beleaguered auto bonds and the precarious ratings position of the top two U.S. auto makers Ford Motor Co. (F) and General Motors Corp. (GM). Adding Fitch to the ratings basket is likely to buy the two corporate bond giants more time in the Lehman Brothers Investment-Grade Aggregate Index, stemming a tide of forced selling that would otherwise have ensued in the event of further credit downgrades. Risk premiums tightened on both Ford and GM bonds. Yield margins on GM's 8.375% bonds due 2033 tightened 27 basis points to 362 basis points over Treasurys.