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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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Loomis Seeks Convertibles Amid Record-Low Corporate Bond Yields |
Aug. 24 (Bloomberg) -- Loomis Sayles & Co. is investing in convertible notes, which can be exchanged for stock, to boost returns amid U.S. corporate bond yields near the lowest on record.
Convertibles “are a way of building in some better upside when straight bonds have fairly limited upside,” said Kathleen Gaffney, co-manager of the flagship $19 billion Loomis Sayles Bond Fund, which has beaten 94 percent of its peers over the past five years.
Investors are flocking to corporate debt as the slowing economy fuels demand for fixed-income securities. A report this week will probably show second-quarter gross domestic product grew 1.4 percent, less than previously estimated, according to a Bloomberg survey of economists. Investment-grade debt yields fell to 3.79 percent on Aug. 19, according to Bank of America Merrill Lynch index data, the lowest on record.
Intel Corp. convertible debt is attractive because its 3.25 percent notes due in 2039 yield 2.51 percent, compared with its stock’s 3.44 percent dividend, said Gaffney of Boston-based Loomis.
“You get the equity upside, but at the same time if there’s volatility in the downside you’re assured repayment of par at maturity,” she said.
Intel’s convertible notes fell 0.4 cent to 115.6 cents on the dollar yesterday, the lowest since July 8, Bloomberg prices show. The firm’s stock fell 24 cents to $18.46 as of 1:44 p.m. in Nasdaq Stock Market composite trading, the lowest since August 2009.
Return Rates
Investment-grade corporate bonds yield 3.81 percent as of yesterday, Bank of American Merrill Lynch index data show. Convertible debt has lost 0.9 percent this month, compared with a 4 percent decline in the Standard & Poor’s 500 Index and a 1.51 percent return including reinvested interest for U.S. corporate bonds.
SanDisk Corp. led $2.65 billion of dollar-denominated convertible bond issuance this month, a 45.6 percent decline from July, according to data compiled by Bloomberg. Companies have issued $29.9 billion of the securities this year, compared with $29.7 billion during the similar period in 2009. Convertible sales were $54.6 billion in the similar span in 2008 and $87.6 billion the year before.
Investor demand for convertibles is “healthy,” Gaffney said. “A lot companies view their stock as undervalued, so demand is greater than supply, which is another positive.”
‘Low-Cost Financing’
Issuance may rise on an increase in corporate mergers and acquisitions as convertible debt offers “low-cost financing,” said Prasanth Burri Rao-Kathi, head of Americas equity-linked capital markets at Bank of America Merrill Lynch in New York. Merger and acquisition transactions in August have reached $194.2 billion globally, the busiest month since March, Bloomberg data show.
For the complete article visit Bloomberg.com
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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