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Watching Windows

Sep 1, 2011

Summer doldrums and a steep spike in volatility have pushed volumes lower in recent months. The door essentially slammed shut for junk credits in August, and left high-grade borrowers to dominate new issuance as they took advantage of razor-thin rates after a flight to safety bid sent yields on US Treasuries lower.
In early July, Colombia emerged for the first time in 10 years as a full-fledged investment grade credit, allowing it to raise $2 billion in 10-year bonds with its lowest ever coupon. Demand hit $7 billion before the sovereign priced the issue with a 4.375% coupon to yield 4.425%. With nine Bs behind it, Colombia was able to capture a wider group of investors through leads Bank of America Merrill Lynch, Barclays and Citigroup.

Early August saw the worst selloff since 2008 in the wake of S&P’s downgrade of the US to AA+ from AAA, but...

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