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Credit Market Overview Cites Fourth Quarter Activity

First few Article Sentences

Credit markets enjoyed outstanding performance in 2009. This was in strong contrast to 2008, the worst year for credit spreads in decades. Liquidity returned to the credit market, assisted by various government programs. In addition to government support, there is now a very strong technical bid that has developed in the market. The strong bid is largely driven by the vast amount of cash and cash equivalents being invested. Investors, tired of earning near zero for money markets and their equivalents, entered the market in an effort to capture part of the spread tightening from the opportunities created in 2008. The combination of government programs and technical support tightened spreads and revived the new issue market to near record levels. Corporations continue to reduce leverage and expenses to improved balance sheets and maintain profit margins. In addition, financial companies have built reserves to cover potential future loan write-downs and have paid back TARP capital to the government.


Leahy, Ryan

 

Prime Advisors

Investment Management

March 1, 2010

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