Loans Versus Bonds Relative Value: Week of September 3

Who says momos are confined to equities. We present to you the latest bond/loan relative action, where every week there is some new vomit inducing squeeze or collapse on no news: this week the yoyo was SS&C Technologies, whose loans tightened by over 100bps, while bonds widened by 20bps. Otherwise, the secured-unsecured divergence continues, with leveraged universe
loans tighter in the last week by another 5 bps to 395 bps, while bonds continue drifting wider, 3 bps wider
over the last week and over 70 bps over the past three weeks.

As we speculated last week, Selec Medical did in fact turn the afterburners modestly, and was tighter 50 and 40 bps across loans and bonds respectively. TRW and West were suspiciously quiet so look for the action to migrate into those names in the next week's edition.