Bond market professionals are not known to provide the same kind of sound bytes their equity counterparties have become famous (or infamous) for in recent years. Yet fixed income types can offer colorful thoughts on otherwise miserable topics, such as a devastating hurricane and its impact on credit spreads. Here are some of the year's more memorable quotations.
"The threat is investment bankers need to make money and they are pursuing ways for companies to raise capital." -- Michael Collins, high-yield portfolio manager at Prudential Fixed Income, on the risks posed by leveraged companies that raise additional capital to pay dividends to equity sponsors (10/18).
"Duration is like Tabasco sauce. You don't need a lot of it to have it have an effect." -- Anthony van Daalen, senior v.p. and head of $1.25 billion in taxable fixed income at Wright Investors Service, on its recent move to trim duration (8/23).
"Rubbish." -- James Foster, director and head of credit at ISIS Asset Management in London, on the quality of recent primary offerings in the European market (6/28).
"It's hard to explain why you'd like to get rid of the debt ceiling if you're fiscally responsible." -- Drew Matus, senior economist at Lehman Brothers, on the debate over whether the Treasury should do away with the debt ceiling and how it is influenced by politics (11/29).
"It's all up in the air." -- Stan August, managing director in high-grade research at Banc of America Securities, on the potential impact of Hurricane Frances on large insurance companies (9/6).
"You can't have a 'distressed' investment if everyone wants to buy it." -- Brandon Stranzl, general partner at Tiedemann BGS Partners in New York, on the challenges traditional distressed investors are having in sourcing collateral given the increasing activity by hedge funds in the market (11/15).
"Investors can't vote with their dollars because non-disclosure is so prevalent." -- Mark Adelson, director and head of structured finance research at Nomura Securities International, noting that non-disclosure in the asset-backed securities market is widespread (2/9).
"Management with a smart business plan will protect investors far more than a covenant package. A smart lawyer can get around any covenant package." -- Dick Cryan, high-yield portfolio manager at Evergreen Investments (5/3).
"Numerically, volatility is very low, but by how my stomach feels, it's very high." -- John Cerra, managing director at TIAA-CREF, on topical issues of concern to fixed-income investors, such as the U.S. presidential election and fears of terrorism (10/25).
"Often the mezz gets the middle-child treatment." -- Howard Hill, managing director at Catamount Investment Group, on how mezzanine noteholders in collateralized debt obligations don't get the same attention as senior and subordinate investors (6/7).
"They are highly leveraged and the benefits they provide to the consumer are minimal." -- Michael Materasso, executive v.p. and head of global fixed income at Fiduciary Trust International, on Fannie Mae and Freddie Mac (3/1).
"Old habits die hard." -- William Prophet, interest-rate strategist at UBS, on how some bond traders are slow to adopt a new indicator of inflation (9/20).
"The whole point of a hedge fund is to do things opportunistically and in a low-profile way. Increasing disclosure to investors undermines this process." -- Theo Phanos, portfolio manager at Trafalgar Asset Managers, on the notion of providing greater transparency to investors (3/15).
"It keeps the Treasury market well-bid every Friday, because people want to hold Treasuries over the weekend." -- William Gossard, portfolio manager at Mesirow Financial, on how concerns about terrorism are affecting the bond market. (8/30).
"We have been in complete run-off for the last 12 months but we're back and open for business." -- Jim Ozanne, ceo of Fairbanks Capital, on the sub-prime servicer's plan to re-enter the asset-backed market (5/17).
"Any investment bank wanting to be a full-service shop has to have a mortgage operation at this point because of the size of the mortgage market." -- Dave Montano, managing director and head of mortgage-backed securities research at J.P. Morgan Securities, on how banks are building up their MBS businesses (6/21).
"The refinancings of today will be the bankruptcies of tomorrow." -- Carl Icahn on his outlook for the U.S. economy and corporate America (5/24).
