Many holders of corporate debt will seek a safe haven in U.S. government debt. Corporate debt investors, the survey found, are checking closely for firms that are Y2K compliant. Investors said spreads on debt issued by noncompliant issuers should widen in the fourth quarter. Over half of those polled expected corporate debt spreads to U.S. Treasuries to widen by more than 10 basis points. Seventy percent of all investors expect liquidity to fall at least moderately.
Investors appear to expect supply and demand distortions to occur in tandem.
Issuance will likely be moved forward, just as investors begin to build their holdings of liquid assets. ZD Inc. ZDNet Logo is a service mark of ZD Inc.