April 30, 2010

SPENDING, NOT THE ECONOMY:

Obama’s Rebounding Economy Revealed in Junk-Bond Dividend Deals (Caroline Salas and John Detrixhe, 4/30/10, Bloomberg)

Investors have gobbled up $99.6 billion of junk-bond sales in 2010, a record for the first four months of the year, including the most bonds to fund dividends for private-equity firms since before the credit crisis began in August 2007, according to data compiled by Bloomberg and Standard & Poor’s LCD. Prices for the average speculative-grade security climbed to 99.7 cents on the dollar this week, the highest since June 2007, up from 54.8 cents in December 2008, according to the Bank of America Merrill Lynch U.S. High Yield Master II Index.

The return of an appetite for risk shows growing confidence that the U.S. will avoid a double-dip recession, said John Lonski, chief economist at Moody’s Capital Markets Group.

Posted by Orrin Judd at April 30, 2010 5:45 AM
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