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On Floating Net Asset Values of Money Market Funds: Will The Curtain Rise? |
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Written by Bill Berliner
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Wednesday, 01 June 2011 11:44 |
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Our recent participation at the Securities and Exchange Commission (“SEC”)1 roundtable discussion on money market funds and systemic risk gave us the impression that the government is moving closer to a policy draft on money market fund reform. Despite overwhelming complaints, the floating net asset value (“NAV”) approach remains a top choice for the regulators. The industry’s leading solution of a liquidity facility faces internal skepticism and possible failure in receiving government backstop liquidity. Although elegant and simple from a theoretical angle, the floating NAV approach requires the government to address asset flight risk, loss of short-term funding concerns, and the shift of systemic risk to the banking system. |
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The Path for Housing GSEs and its Impact on Corporate Cash Investors |
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Written by Capital Advisors Group
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Friday, 01 April 2011 12:27 |
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Recent events related to government sponsored enterprise (GSE) reform have prompted short-duration investors to question the level and nature of government support for their debt issuance after December 31, 2012. The housing GSEs play a critical role in the U.S. mortgage market, representing 99% of all new mortgagebacked securities (MBS) issuance in recent years. Money market funds owned $402 billion in agency debt at the end of 2010, which accounts for approximately 15% of all fund assets, and direct holdings of agency debt doubled in corporate cash portfolios between 1Q 2009 and 4Q2010. Due to their current government debt classification, the sudden removal of U.S. Treasury support for GSE debt may pose systemic risk. |
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Dissecting Prme Money Fund Holdings |
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Written by Capital Advisors Group
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Thursday, 03 February 2011 08:59 |
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In reviewing credit concentrations in a group of AAA-rated prime funds representing 50% of industry prime fund asstes, we found that fund managers improved credit and liquidity positions by boosting investments in U.S. Treasuries and repurchase agreements. |
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Asset-Backed Securities: Time to Reevaluate Their Place in Corporate Accounts? |
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Written by Capital Advisors Group
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Tuesday, 01 March 2011 08:51 |
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AAA-rated fixed rate credit card ABS may be viable investments for corporate treasurers. Transparent asset collateral, servicer quality, potential sponsor support, relatively short maturity schedule, and soft-bullet structure are some of the sector’s advantages over other forms of ABS. The credit card ABS sector stood the test of time without significant ratings implications during the Great Recession. Recent delinquency and charge-off statistics confirm that the worst may be behind us in consumer credit quality. |
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Three Cash Investment Trends (and Twists) in 2011 |
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Written by Capital Advisors Group
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Thursday, 06 January 2011 08:43 |
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Meet the New Year, same as the old - with a twist. In preparing our treasury investment strategy outlook for 2011, it seems there isn't much we have not already seen or experienced in 2010. In the interest of keeping a healthy dose of skepticism to the consensus view, we feel obliged to offer our take on trends, as well as "twists," in cash investments in the New Year. |
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Last Updated on Monday, 10 January 2011 07:02 |
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