2 min readExecutive Summary A portfolio of laddered maturities may have better yield advantage over money market funds in a rising rate environment. Market Cycle Comparison Since 1993, the average net-of-fees yield advantage of 1-year A-rated corporate bonds over the Lipper institutional Money Market Average was 86 basis points annually. In the rising rate environment of 1994,…
3 min readWhat is 4(2) Commercial Paper? Commercial Paper is a short-term unsecured promissory note to repay a fixed amount on a certain future date. The product is exempt from SEC registration according to one of the following sections of the Securities Act of 1933: 3(a)(3), 4(2), and 3(a)2. Today, the US commercial paper market is the…
2 min readMoody’s Review for Downgrade and Fitch Rating Watch Negative: AMS-3, 2003, LP, Class A-1 auction rate note (Aaa/AAA) AMS-3, 2003, LP, Class A-2 auction rate note (Aaa/AAA) AMS-3, 2003, LP, Class A-3 auction rate note (Aaa/AAA) AMS-3, 2003, LP, Class A-4 auction rate note (Aaa/AAA) AMS-3, 2003, LP, Class B auction rate note (A3/A) Opinion…
2 min readIntroduction Broker-dealers market Auction Rate Securities (ARS) to corporate clients as yieldier alternative investments to high-quality cash management vehicles. While the securities’ yield advantage over very short-duration (generally 28 or 35 days) bonds is possible, the brokers often fail to point out the price an investor pays in terms of liquidity given up, opportunities lost…