Companies will extend the maturity of their liabilities and lock in long term financing.
Companies are faced with Fed action to reduce the monetary base, and Treasury sales to fund the deficit.
Banks will begin to participate in longer-term financing for credit worthy companies who don't have access to the bond market.
Paterson calls these yield spreads, 'credit spreads' to differentiate them from the yield spread between Fed Funds and the 10 year note.
* * * * * J B K * * * * *
San Francisco
Corporate bond sales are falling and borrowing costs are increasing for the first time in eight weeks amid investor concern the pace of economic recovery is flagging.
Bond sales worldwide fell 52 percent last week to $48 billion, from $99.8 billion in the previous period, according to data compiled by Bloomberg. So-called yield spreads widened for the first time since the five days ended Nov. 27, based on Bank of America Merrill Lynch's Global Broad Market Corporate Index.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a54_V.qLJknY&pos=6
