Lehman Bros 7.25% Pref'd Series P (fka LEHPQ)

[coach tequila]

INVESTMENT GRADE AND JUNK BONDS RECOVERY ONLY HELPS ALL LEHMANS!

Demand for high-risk, high-yield or junk assets has returned after the market was effectively shut for more than a year as investors shunned all but the safest securities. High- yield bond spreads narrowed 53 basis points this week to 988 basis points yesterday, falling below “distressed” levels for the first time since Sept. 25, Merrill data show.

High-yield bonds are rated below Baa3 by Moody’s Investors Service and BBB- by Standard & Poor’s.

Bonds rated CCC or less, the riskiest debt, are trading at an average price of about 69 cents on the dollar, the highest since Lehman filed for bankruptcy Sept. 15, Merrill data show.

‘V-Shaped Scenario’

“The lowest-quality category of high-yield bonds is pricing in a recovery scenario as optimistic as any V-shaped scenario could be,” Bank of America Corp. strategists Oleg Melentyev and Mike Cho in New York said yesterday in a report. “Unless this credit cycle is fully in the rearview mirror, this level has no historical precedence.”

The extra yield investors demand to own U.S. investment- grade bonds rather than Treasuries fell to 302 basis points yesterday, the lowest since Aug. 11, down from 600 basis points on March 13, Merrill index data show. Spreads on bonds issued by European companies have narrowed 215 basis points to 248 basis points from a high of 463 basis points in March.

Keep the Faith! MARK UPs COMING IN AUGUST!

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a22yt8tRjujk

Coach T