Volume 2, Issue 1: January 12, 2010      

CREF Invite

Article One Title

QuadCapital's 13th annual Wine & Cheese Reception on Tuesday, February 2, 2010 3:45 p.m. to 5:00 p.m. at the Mandalay Bay, Las Vegas, Breakers C (South Convention Center, Level 2).

At 4:15 p.m. we will provide a brief overview of the corporate credit market, allow time for Q&A, and have $2,250 in drawings. Click here to view or print an invitation...



Article Two Title

We are pleased to announce that Bridget Chen has joined QuadCapital as an Associate.

Bridget has considerable experience underwriting and closing Commercial Mortgage Backed Securities (CMBS) loans during her time at Bank of America Securities (Chicago) and JPMorgan Chase (New York).

Following her CMBS career she joined Rockwood Capital (White Plains) and broadened her expertise to include real estate equities before relocating to Madison, WI.

Bridget is a graduate of the Wharton School where she received an undergraduate degree in Economics with concentrations in Finance and Actuarial Science and is a Chartered Financial Analyst (CFA) charterholder.

Contact:
chen@quadcapital.com
608-821-1202



QuadCapital - Calendar of Events








2009 was the
"best of years
and worst of years"

The high yield bond market had its best year ever in 2009 with the weakest credits performing the best. "CCC" and lower rated bond index recorded a historical return of 94% and the "BB" index returned 45%. On the other hand, the long Treasury market had its worst annual performance in 2009 in at least three decades with yields on 10 and 30 year maturities rising 140 to 180 basis points (bond prices and yields move in opposite directions). January and December 2009 were especially bad months. The yield on the 10-year Treasury ("UST") rose to 3.85% at year end 2009 from the beginning of the year level of 2.46%; In December alone, 10-year UST yields rose by approximately 57 bps. The 30-year UST yield rose from 2.83% to 4.63% during 2009. A positive impact was the narrowing of spreads over the year. While spreads contracted the most for lower rated credits, we saw spreads come in by 100 to 200 bps for most investment grade credits.

Although Walgreen's 10-year corporate bonds declined to about 60 bps at year end from 287.5 bps at issuance in January 2009, the CTL spread only narrowed by about 80 bps due to the large demand for capital for Walgreens CTL financing. Coincidentally, the rate for Walgreens CTL coupons early in the year was 7.15% and is currently just slightly higher at today's spread. Spreads on other corporate credits such as Lowe's and Home Depot declined about 175 to 200 bps from the beginning of the year.

We are optimistic that 2010 will be another good year for CTL financing. There will continue to be capital available for the higher rated credits and we expect to see more capital become available for certain "BBB" rated credits, especially non-retail. Weaker retail credits will remain difficult to finance.

Signature

Lois O'Rourke CFA, CRI   608-821-1204    |    Charlie Knudsen CFA, CRI   608-821-1201

QuadCapital Advisors, LLC | 402 Gammon Place | Suite 350 | Madison | WI | 53719

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