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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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Convertibles Beats Bonds as Investors Wager on Stock Rally: Credit Markets |
Bloomberg - Oct. 5, 2010 - By John Detrixhe
Convertible securities are beating the U.S. corporate bond market by the most in more than 10 years as investors wager stocks will outperform company debt paying record-low yields.
Debentures that can be exchanged for shares returned 4.42 percentage points more than company bonds in September, the biggest gap since August 2000, according to Bank of America Merrill Lynch index data. El Paso, Texas-based Western Refining Inc.’s 5.75 percent convertible notes due in June 2014, the most traded of the securities yesterday, rose to the highest level since January.
Investors are seeking to profit from the rally in equities by buying convertible bonds, which are deemed safer than stocks should the economy slip back into recession. Junk bond prices are above par for the first time since 2007 and the Standard & Poor’s 500 Index trades at 15 times the past 12 months’ earnings, a 28 percent discount based on its 20-year average.
“Either bonds are a bubble or stocks are cheap,” said Edward Silverstein, a senior managing director who helps manage $2.7 billion of convertible bonds at MacKay Shields LLC in New York. “You basically have an investor that’s scared.”
Convertible bonds may also protect fixed-income investors from companies taking on debt to boost their share price through stock buybacks or mergers at the expense of credit quality, said Hans Mikkelsen, credit analyst at Bank of America Corp.
“If you just buy a corporate bond, you only get the negatives,” Mikkelsen said.
Low-Cost Financing
Companies from Microsoft Corp. to PepsiCo Inc. and Hewlett- Packard Co. are taking advantage of low-cost financing to purchase their stock, announcing buybacks of at least $258 billion this year, compared with $52 billion in the first three quarters of 2009, according to data compiled by Birinyi Associates Inc.
U.S. corporate bond yields fell to a record-low 4.618 percent yesterday, according to Bank of America Merrill Lynch index data.
Borrowers issued $1.9 billion of U.S. convertible bonds in September, 26.7 percent more than the prior month, Bloomberg data show. Sales this year of $22.4 billion compare with $35.3 billion in all of 2009 and $61.3 billion the year before.
Elsewhere in credit markets, the extra yield investors demand to own company bonds worldwide instead of similar maturity government debt was unchanged at 172 basis points, or 1.72 percentage point, down 8 basis points from Sept. 1, according to Bank of America Merrill Lynch’s Global Broad Market Corporate index. The spread has ranged from a low this year of 142 basis points in April to a high of 201 in June. Average yields were 3.45 percent.
Markit CDX Index
A measure of corporate credit risk in the U.S. fell. The Markit CDX North America Investment Grade Index, a credit- default swaps benchmark that investors use to hedge against losses on corporate debt or speculate on creditworthiness, declined 4.5 basis points to a mid-price of 100.55 basis points as of 1:03 p.m. in New York, according to Markit Group Ltd. The index is trading at the lowest since a new version started on Sept. 20.
Credit-default swaps typically fall as investor confidence improves and rise as it deteriorates. The swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.
For the complete article visit Bloomberg.com
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| Stuff to look at |
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Income Security Recommendation January 2013 Issue.
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