Credit & Risk

Frannie and Freddie: Why Their “Bad News” May Be Good For You

Frannie and Freddie: Why Their “Bad News” May Be Good For You

3 min readIntroduction In a move to restore confidence in the U.S. mortgage market, President George W. Bush signed into law on July 30th, a housing rescue bill that includes a provision for the U.S. Treasury Secretary to inject capital into Government Sponsored Enterprises (GSEs) through direct stock or debt purchases.. The birth of the so called…

Cautious Optimism On The Credit Front

1 min readNow for some good news…. Indicators of a recovering credit and liquidity environment have emerged significantly over the last month. The TED spread (3-Moth LIBOR vs. Treasuries) continued to narrow to 79 basis points, while a continued sell-off in treasuries contributed to a stronger upward bias in the Fed Funds futures contract. These indications, along…

3 Common Credit Deficiencies in Cash Portfolios

1 min readNow well into our 18th year of working with treasury managers across the country, it’s as clear as ever that managing risk remains one of the least understood and most challenging areas of corporate cash management. The treasury landscape is littered with painful examples of write-downs from highly rated securities whose risk was miscalculated, misunderstood,…

The Top 3 Credit Deficiencies in Corporate Cash Portfolios (And How to Avoid Them)

The Top 3 Credit Deficiencies in Corporate Cash Portfolios (And How to Avoid Them)

2 min readNow into our 18th year of working with treasury managers across the country, it’s as clear as ever that managing risk remains one of the least understood and most challenging areas of corporate cash management. The treasury landscape is littered with painful examples of write-downs from highly rated securities whose risk was miscalculated, misunderstood, or…

(More) Reflections on the Money Market Fund Debacle

(More) Reflections on the Money Market Fund Debacle

3 min readExecutive Summary Prior to the recent credit crisis, strong criticism of money market funds taking on too much risk could easily have been dismissed as fear mongering. With strong (but now dubious) triple-A credit ratings, constant $1 per share prices, daily liquidity, strong brand recognition, and deep-pocketed parents, what was not to like about money…

Volatile Times Call For Innovative Actions

2 min readAside from our own clients, in 17 years of helping guide Treasurers through the cash investment markets, I have never seen the corporate landscape littered with more casualties than today. Of all of the companies holding auction rate securities (ARS) today, an estimated 70% are experiencing regular auction failures and severe liquidity issues. In some…

The Risks of Greed and Fear

2 min readFor cash investors, there exists a delicate and sometimes frustrating balance between deciding to stretch for those additional 10 basis points in yield and the urge to recoil to treasuries when isolated liquidity issues arise. To make wholesale judgments of any asset class or investment sector can result in unfounded generalizations that are rarely based…

Seven Frequently Asked Credit Process Questions

Seven Frequently Asked Credit Process Questions

3 min readIntroduction In its most basic form, investing is all about understanding and managing risk. For fixed income securities, it’s more about managing credit and interest rate risk. And, understanding credit is of particular importance for corporate cash investors whose primary concerns are principal stability and liquidity, while attractive yield potential is often a secondary concern….