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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Robohogs who wrote (26541)	4/4/2008 9:26:38 PM
From: Robohogs	Respond to of 52153

OT Credit - I am pasting a few paragraphs from a Feb 13 article on Primus to give folks background on historical spread levels. My access to historical spread levels appears to be gone otherwise I would simply go back and give folks quarterly end data for the main series I am now going to post. From 2005 to the summer of 2007, the U.S. CDX investment grade index -- a basket of corporate credits -- generally traded at spreads of below 50 basis points, with the exception of when they peaked at around 75 in May 2005 when Ford Motor(F - Cramer's Take - Stockpickr) and General Motors(GM - Cramer's Take - Stockpickr) were downgraded to junk status, according to Bear Stearns research. .......But in the summer of 2007, spreads on the CDX investment grade index widened to 100 basis points, as fears of the brewing credit crunch drove up the cost of protection. Spreads dipped in the fall, but rose to a record 143 basis points on Tuesday, according to Markit. Eventually, they got into the 170s from what I saw (could have gone even higher, I just don't know). So move was from 50ish up to 75 during Ford/GM crisis, back to 50 and then up to 100 in summer 2007 then back down into 70s and then up to 170 and now back to 100. Monster moves! Jon

To: Robohogs who wrote (26541)	4/5/2008 12:23:00 AM
From: Robohogs	Read Replies (1) \| Respond to of 52153

I was thinking about this. Remember the Leveraged Loan pricing got out to 600 bps at one point and is now 367. When I first started doing leveraged loans, pricing was in the 300-350 range, so we are close to more normal, non-super bull conditions. The banks might even be able to sell some loans and close some deals. Makes me wonder if CCU and BCE don't ultimately get done. BCE much higher odds vs. CCU, given litigation. I read somewhere that the banks were surprised by the suits as they were haggling over some revolver terms and thought they were close so maybe it does come back. Jon