2 min readWhen overnight repo rates temporarily rose from 2% to 10% in September, some dismissed the spike as an unfortunate but rare confluence of idiosyncratic circumstances. But if that makes you think the liquidity crunch was a one-time event, think again. Our October research report, Repo Ruckus Reveals Hidden Issues in Liquidity Markets, makes a good…
2 min readAre you feeling as uneasy as I am? China’s growth is slowing, Brexit is looming, and winds of war in the Middle East have sent oil prices on a roller coaster. Closer to home, the yield curve is inverting, corporate debt is mushrooming, and just last week Wall Street and the Fed were caught napping…
2 min readFor early-stage companies seeking debt financing, the most obvious questions are often the most difficult to answer. When is the most appropriate time to pursue debt financing? Why should you consider debt at all? And how much should you borrow? At Capital Advisors Group, we’ve advised hundreds of companies on billions of dollars of debt…
2 min readWhen a multi-billion-dollar rate-fixing scandal in 2012 undermined confidence in LIBOR as the standard global benchmark for interest rates on short-term debt, regulators from the U.S. and U.K. started searching for a suitable replacement. A lot was riding on the choice: more than $200 trillion in floating-rate bonds, derivatives contracts, securitizations, and loans around the…
2 min readAmid expectations that the Fed will soon complete its about-face from hawk to dove with its first rate cut since 2008, cash investors are looking as hard as ever for relatively safe short-term investments capable of delivering decent returns. And many are turning to a market that in the past they often overlooked—corporates with BBB…
2 min readEquity managers concerned about the long-term health of their investments have long had to take environmental, social and governance concerns into account. So-called ‘ESG’ investment guidelines help them steer around all kinds of management crises that might lay waste to returns in otherwise pristine equity portfolios. Until recently, however, fixed-income liquidity investors managing short-term portfolios…
2 min readMoney market funds have become more resilient since SEC reforms transformed the industry with higher credit, liquidity, transparency, and oversight standards. The 2008 bank run that broke the buck in the old prime funds is, for now, just a bad memory fading into the rear view mirror. But unanticipated side effects of those historic reforms…
2 min readThe Fed took more than a few people by surprise several weeks ago when it suddenly signaled there would be no interest rate hikes in 2019. Especially when it pointed to “slower growth of household spending and business fixed investment.” Then, in seemingly no time at all, the yield curve inverted. Anyone will tell you…
2 min readWith a March 29th deadline looming for the UK to leave the European Union, there is still no decision about how the departure will be managed. In the two years since a popular referendum triggered the Brexit process, negotiations over a deal for a smooth exit have been unsuccessful. Scenarios range from a “hard” Brexit,…
2 min readRemember CDO’s, those collateralized debt obligations at the center of the massive mortgage meltdown in 2008? These days, you can expect to start hearing about CLO’s, collateralized loan obligations, that are at the tip of a rapidly growing iceberg of leveraged corporate debt. The recent growth of CLO’s is only one of many warning signs…