The Federal Reserve committed Monday to conducting more asset purchases of Treasury securities and mortgage-backed securities and announced $300 billion in new financing for credit facilities.
The central bank said its program to support money market mutual funds will also serve as a backstop for state and local governments.
The authority, which tapped its $1 billion credit line and received a warning shot from Moody's, says COVID-19 is a disaster that requires a national response.
Moody’s lowered the giant IBD network’s credit rating with sobering words that could resonate across wealth management.
Lipper reported a whopping $12.2 billion of outflows from municipal bond funds. Out of that huge number, $5.3 billion were from high-yield funds. The $12 billion figure of outflows in one week equates to about 3% of annual municipal volume.
Moody’s affirmed the company’s “B3” rating but signalled the potential wide-reaching impact of the pandemic across wealth management.
The credit watch involves single-borrower securitizations of commercial mortgages for high-priced resorts in Florida and Hawaii.
A coalition of healthcare industry organizations is asking for $100 billion in direct federal help, warning that the survival of some hospitals is at stake.
A number of proposals have been floated for debt payment holidays and other types of moratoria, but such approaches offer solutions that are worse than the problems.
While collapsing market prices do not present immediate worries for CLO managers, the prospect of future downgrades and defaults becomes more problematic.