Corporate Bonds

Overview

Corporate Bonds are debts issued by industrial, financial and service companies to finance capital investment and operating cash flow. In terms of total face value of bonds outstanding, the corporate bond market is bigger than each of the markets for municipal bonds, U.S. treasury securities, and government agencies securities. Investors in corporate bonds have a wide range of choices when it comes to bond structures, coupon rates, maturity dates, industry exposure and credit quality.

Total Return (Index) measures the total amount earned by owning a security over the time period. It incorporates the accrued interest on the bond during ownership, coupons paid out on the bond, and rise and fall of the bond's price. It is the most complete measure of the amount of money made on holding fixed income issues in the index.


U.S. High-Grade Trading Platforms

Olympia Capital Exchange has Instant access to 67 broker-dealers supporting a comprehensive range of securities. Our clients can choose amongst $30+ billion and 12,000+ line items of dealer inventory. When it comes to market pricing information and efficiency in execution, MarketAxess is the undisputed leader in the electronic trading of U.S. high-grade corporate debt, both fixed rate bonds and floating rate notes (FRNs). Olympia’s Institutional investors experience superior liquidity, speed and efficiency delivered by having direct access to an award-winning trading technology. View this bond trading platform at http://www.marketaxess.com/index.php

The FINRA/Bloomberg Active U.S. Corporate Bond Indexes are comprised of the "active" (most frequently traded) fixed coupon bonds represented by FINRA TRACE, FINRA's transaction reporting facility that disseminates all over-the-counter secondary market transactions in these public bonds. Indexes are updated after 5:30PM ET each business day. The indexes are rebalanced on a monthly basis. Price (Index) is the weighted average Index price of all bonds in the index. Yield (Index) is the weighted average Index yield of all bonds in the index. View these indexes at the link http://www.bloomberg.com/markets/rates-bonds/corporate-bonds/

The Market Aggregate statistics provides an end-of-day recap of secondary corporate bond market activity in publicly traded TRACE eligible securities.



The Global Bond sector offers a wide spectrum of potential investments, from government securities and corporate debt and from developed world economies to emerging market debt. Bond investors have two enemies - high interest rates and higher inflation - but both are unlikely to present much of a challenge for a while.

Olympia Capital Exchange is ready to provide our institutional and private equity investors with considered guidance.


"Something Is Broken" -- It's Europe

Something funny is going on in the world of corporate bonds now — something looks broken. There is less willingness, all of a sudden, to be lending money to corporations, maybe because the absolute yields are very low as investors start to see a saturation point in Europe.


Should policymakers fail to contain the euro zone debt crisis, bank funding could get squeezed, making it harder for some companies to borrow to repay existing debt. Thus, European and US Investors are being lured by fast-growing economies with young populations free of the sovereign debt burdens troubling Western competitors.


What about Chinese Corporate Bonds?

The Chinese government's response to companies and investors is pretty simple; Hold on, and set aside cash. They know that China's local debt (at a whopping $1.7 trillion) has become a major concern, as have non- performing loans.


East Asian Bond Markets

East Asian bond markets offer fantastic opportunities - GDP growth in Asia is far higher than the US or Europe. Asian credit and sovereign bond fundamentals look good right now, so it makes sense for investors to diversify into this region. Although slowing growth, sovereign risks and currency imbalances might concern investors, they can still benefit from remaining diversified and making careful credit selection decisions.

The bond markets of emerging countries in East Asia, including the Philippines, grew from a year ago, according to the latest issue of the Asia Bond Monitor (ABM) of the Asian Development Bank. Data from the ABM showed that the outstanding bonds in emerging East Asia reached $5.5 trillion. “Capital flows into emerging East Asia bond markets remain strong as investors chase yields,” the ADB said in the report.

Compared with the United States and countries in the Euro zone, developing countries in Asia have been posting better growth rates in recent years. This has attracted more portfolio funds into the region for corporate bond investments.

Historically, corporate bonds in emerging markets have been clouded by perceptions of illiquidity and high risk, but these concerns are receding. In particular, liquidity has improved significantly.

Skillful investors in this asset class are those able to take advantage of the sovereign-risk premium, while at the same time capturing the improving credit story. Olympia Capital Exchange specializes in the exciting and evolving corporate markets of South East Asia.

Contact Us for fresh ideas in the Emerging Market Debt (EMD) area.