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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Apocalypse Not |
Forbes.com - March 25, 2010 - by Matthew Craft
Fitch says the $1.4 trillion debt maturity mountain is more of a molehill.
Of all the hazards facing credit markets, one has recently been compared to a natural disaster, labeled an "avalanche" and even imagined as a catalyst for an earth-shattering apocalypse. It's the staggering wave of bonds and bank loans coming due, estimated by the rating agency Moody's to reach $1.4 trillion over the next five years. The doomsday scenario pictures legions of companies unable to pay off or roll over debts and getting pushed into bankruptcy.
A report released this week by Fitch, another rating agency, may soothe some of these fears. The most vulnerable companies should be able to handle the bulk of their debts, the report says, thanks to a welcoming high-yield bond market, banks' desire to ease loan terms rather than suffer from a default and, most of all, a resurrection of loan buyers.
The $1.4 trillion "maturity wall" sounds daunting. A closer look shows investment-grade debt makes up $600 billion of the total; those are bonds from large companies that have little trouble tapping investors or paying debts with cash. The real threat, then, is to companies with weak credit.
Estimates differ among rating agencies, but Fitch sees $770 billon in low-rated loans maturing over the next five years. The firm says the loan market could absorb $425 billion of companies' loan refinancing needs with the help of new collateralized loan obligations--one of the many Wall Street creations blamed for inflating the credit bubble.
So-called CLOs buy loans and slice them into new products for sale. Because loans usually have payouts tied to floating rates, rising interest rates make them more appealing to investors. When the Federal Reserve begins lifting borrowing rates from record low levels, it could spur banks to launch more of these funds to gobble the loans up. A revival of these much derided investments, Fitch argues, may save companies from disaster.
Agreements between lenders and borrowers to tweak loan terms could soak up $135 billion. Such "amend and extend" deals hit $60.6 billion in 2009, according to Thomson Reuters. Another $80 billion could be pushed into the high-yield bond market, where bond buyers have already proved willing to refinance bank loans. Barclays estimates that 75% of all high-yield corporate bond sales in the past year raised cash to pay off other debt.
Fitch says the high-yield bond market should roll over the $330 billion in bonds coming due over the next five years along with $80 billion in loans. That assumes steady high-yield bond sales of $125 billion each year through 2014; that's $27 billion less than last year.
So far this year, U.S. companies have borrowed $39 billion in the market through March 19, according to Thomson Reuters. Among the largest issuers: the car loan provider GMAC ( GJM - news - people ), hospital chain HCA and SLM Corp ( SLM - news - people ), commonly known as Sallie Mae.
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| Stuff to look at |
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S&P Commentary and Newsletters: S&P
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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