Takeover talk buoyed the stock markets on Monday. But for corporate bond investors, this sign of financial confidence could signal the end of their day in the sun.
With banks reluctant to lend this year, corporate bond markets have assumed new importance. Investors have been feted and executives have been anxious to expound on such bond-friendly favourite themes as balance sheet strength. New groups of investors, keen on the relative safety of bonds, have meant that record supply has been snapped up, allowing prices to rally and spreads to tighten.
