TALK TO ANYONE who works in US debt capital
markets and you will be told that a substantial bond market
correction is on the way - even that it's well overdue. The
only debate is about precise timing and how long the investor
casualty list will be. But looking at just the corporate bond
market over the past 18 months, some bankers argue that the
fallout happened a long time ago.
Some say that it happened - in the investment-grade market at
least - when cable assets plummeted to trade at between 50 cents
and 60 cents on the dollar last year. Or indeed when established
issuers such as Ford Credit saw their dollar bonds trading on
spreads north of 600 basis points over treasuries in the face of
unprecedented investor skittishness last October. "Are we going to
have a healthy correction? Yes. But it's not going to be anything
as bad as we've already had," is one...
