Loans Versus Bonds Relative Value: Week Of April 23

Tightening continues in the universe of 30 tracked names although at a much more moderated pace compared to the prior week. The average loan spread tightened by 24 bps to 674 bps while bonds tightened by 64 bps to 1,317 bps from the prior week. The equity market squeeze continues, and while the squeeze in Neiman Marcus bonds is over, Sealy's is continuing unabated: following last weeks 800 bps tightening, this week Sealy collapsed another 600 bps. And as in the prior week, Sealy loans barely moved. TRW also saw a significant tightening in both bonds and loans.

Some other odd data: in the universe of loans tightening and bond widening we have Neiman Marcus at a 150 bps spread, while the opposite was true for West Corp, PanAmSat, First Data, BE Aerospace and Alliance Imaging.



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