Morning Meeting: U.S. Credit Outlook for 2017

The video discusses the expected decrease in credit issuance for 2017 due to reduced merger financing and policy uncertainties, particularly around corporate taxes. It explores the impact of tax policy on debt markets, highlighting the potential for reduced supply and changes in borrowing costs. The discussion also covers the implications for investment, suggesting that companies may rely on cash reserves rather than issuing new debt. The video concludes with an analysis of the investment grade market, identifying attractive opportunities in deeply subordinated bank markets and the effects of an operation twist strategy.

What is one reason for the expected decrease in credit issuance in 2017?

• Increased merger and acquisition financing

• Higher net supply

• Uncertainty in corporate tax policies

• Lower maturities

How might repatriation affect companies like Google and Apple in the debt market?

• Have no impact on their debt issuance

• Force them to issue more bonds

• Increase their debt issuance

• Reduce their debt issuance

What is a potential consequence for banks due to companies like Apple and Google reducing their issuance?

• Lower borrowing costs

• Higher borrowing costs

• No change in borrowing costs

• Increased lending to banks

What is an attractive investment opportunity in the investment grade market according to the discussion?

• Short-term bonds

• Deeply subordinated bank markets

• High yield corporate bonds

• Government securities

What strategy is mentioned as being attractive for investors in the investment grade market?

• Operation twist

• Investing in foreign markets

• Selling long-term bonds

• Buying short-term bonds