Talking Point - Risk repricing
Does the recent slump in bond issuance, combined with a slowdown in LBO financing, signal a period of indigestion or the beginning of a repricing of risk? (NB views received by August 17)
Dominic Pegler, Head of fixed-income strategy, BGI, London
Liquidity in the credit markets has either slowed to a trickle or else completely dried up; issuance of structured fixed-income products has more or less stopped; the queue of loans waiting to be issued is reportedly in the region of $200-300m. It certainly sounds like a case of severe market indigestion.
At the same time, though, the markets are doing what they are supposed to do - allowing prices to adjust in response to new market
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