Amid rising bond-market volatility, frequent borrowers are finally considering how they can contribute to greater liquidity, ease investors’ long-standing fears of being trapped in losing positions as bond prices gap down and avoid paying an illiquidity premium for new issues.
Reasoning that investors will put a value on the ability to trade in and out of an asset in size at a tight spread and with minimal impact on the secondary market price, borrowers are taking the obvious step of concentrating previously dispersed liabilities into fewer outstandings.
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