Loans vs. Bonds Relative Value

The first tightening in both asset classes, as loans widened by 3 bps and bonds by 12 bps. Third derivative? Continuing on the theme from the prior week, Neiman Marcus bonds continue widening and now the bonds have joined the party as well. The biggest bond widener last week was First Data, while the squeeze is likely extracting the last few drops of blood from Sealy (ZZ) shorts. Look for the inevitable pullback over the next few days.

Some bizarro world factoids: Aeroflex (ARXX), Laureate (LAUR) and Pantry (PTRY) loans widened while bonds tightened.

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Data from LoanConnector