US Credit Market Carnival Continues To "Zero Interest Rate".
On Thursday, the Federal Reserve's FOMC meeting on September declared that interest rates remained unchanged.
The Fed decided to keep interest rates at zero for eighty-second consecutive months, and underwriters, fund managers and credit strategy analysts were preparing for the resumption of debt issuance.
Rick Rieder, chief investment officer of the world's largest fund company, said that loans are still attractive for businesses.
However, enterprise
To loan
The scope has raised concerns about over leveraging.
Some of the oil and gas producers and miners who rated junk and once leveraged are now struggling to refinance to cope with a sharp fall in commodity prices, which also pushed us corporate bond yields to a new high in two years.
RBC analyst of Fortune Management Inc's fixed income Strategy Department
Craig Bishop
Now, issuers have the opportunity to take advantage of lower interest rates.
The Fed's interest rate policy and quantitative easing plan will
Loan yield
For a long time to stay low, enterprises in all aspects of the business have used low-cost financing.
They use financing to provide acquisition funds, buy back stocks, and refinance higher cost debts.
Before the Federal Reserve announced that it would temporarily raise interest rates, the European Telecom Company Altice NV, the French giant Patrick Drahi, intends to raise $14 billion 500 million to acquire Cablevision Systems Corporation Cablevision Systems Corporation.
This will increase the debt burden of the company to about eight times its profit.
Vincent Murray, head of Mizuho Securities's fixed income division in New York, said that he was ready to deal with a large number of bond pactions on Monday.
Nevertheless, the extra yield and the Fed's zero interest rate delay have given the bond investors reasons.
In fact, even though the Fed raises interest rates, few people think it will affect the lending market, says Stephen Antczak, a credit analyst at Citigroup.
Because even if interest rates are raised, low yields still provide plenty of buffer for most companies to absorb extra costs.
For highly rated companies, it also takes time for them to influence their borrowing costs.
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