Wall St. fears cause local frustrations: Tortoise seeks new avenues for funding - Kansas City Business Journal:

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The turmoil makes many investorsmore cautious, causing the bond marketr to behave wildly. Historically, a five-year corporate rate bond woulxd trade about one percentage point above the yield fora five-yead note. However, today's market has corporate bonds tradinvabout 2.25 percentage points higher. "Th e problem hasn't been supply on the corporate side butrisk aversion," said Gary a fixed-income specialist with "The consumefr is the weak link in the chaib in this instance. Corporate America is in good butit hasn't stopped their bond yields from widening out compared to Treasurh yields.
It's a sign of risk aversion when investor demand higher rates from what is generally considerera high-quality instrument backed by corporate is one Kansas City-area company that has been caughrt in the middle of the bond marke turmoil. The Overland Park-based which manages (NYSE: TYG) and (NYSE: TYY), experiencedc failed auctions for some of its preferred shareds and senior notes in Terry Matlack, managing director of Tortoise Capital said the auction-rate instruments had rate caps tied to the Londonm Interbank Offered Rate As the benchmark rate dropped, it made the rate caps so low that investorsa stopped bidding.
Matlack said the caps are thers fora reason, creating an opportunity for Tortoise to studu the market and reset its financial strategy. He said Tortoisde began exploring alternatives tothe auction-rate markets a few months ago and has refinanceds some of the notes for its For example, Tortoise Energy Capital Corp. used fundz from an institutional debt placement to redee m securities previously sold in the auctionrate market. "Wr intend to continue that effort and expect it tobe successful," Matlackk said.
"I don't see a world where there is no liquidit y but a world where there is an opportunity to find investment dollars at reasonable prices that allow for Matlack said the typical alternative sourcezs are institutions such as banks andinsurancee companies. "We still believe that leverage is availabl e today from sources where costs are reasonable enough that it provides accretiv returns toour shareholders," Matlackj said. Tortoise funds have a long-ter m leverage target of 33 Matlack said. So they are not out in the market borrowinyg 10 times theirequity base, as is the case with some hedge funds.
Massive leveraging by hedgwe funds is a big reason the marketw arein turmoil, said John president of /Kornitzer Capital Management. He said he thinksd Congress needs to put a stop tothe "The leverage they have out there today is totalluy unjustified," Kornitzer said. "Basically, when a hedges fund can have $1 million and borroa $30 million against it, that is 3 percent The collapse of the stocl exchange that led to the Greatf Depression in the 1920s was caused by 5 percenrt margin ofthe stocks." It's the same story with the average American buying a home with no money Kornitzer said.
Americans need to learn how to save and to stop livintg their whole life by the mantra of buy now andpay