Jul 21, 2008 07:09
15 yrs ago
English term
Sworn translator, finance expert
Native in: Norwegian 
Works in: English to Norwegian, German to Norwegian, Swedish to Norwegian, and 8 more.
convertible issues more than running a real risk
English
Bus/Financial
Investment / Securities
"The widening of credit spreads is the greatest risk, since they drastically reduce the liquidity of convertible issues more than running a real risk of large-scale default."
I have been staring at the sentence above for some time. The terminology is ok, but there is something about it that I don't understand. I would appreciate if someone could rephrase it for me.
I have been staring at the sentence above for some time. The terminology is ok, but there is something about it that I don't understand. I would appreciate if someone could rephrase it for me.
Responses
46 mins
Selected
the real risk is not large-scale default but widened credit spreads
Very awkwardly written sentence. I think the author means to say something along these lines:
"The greatest risk is not large-scale default but rather the widening of credit spreads, since they drastically reduce the liquidity of convertible issues."
"The greatest risk is not large-scale default but rather the widening of credit spreads, since they drastically reduce the liquidity of convertible issues."
Note from asker:
| That actually makes a lot of sense. Thanks! |
4 KudoZ points awarded for this answer.
+1
2 hrs
which more than runs a real risk of large scale default
I read it differently from aricb.
The widening of credit spreads is the greatest risk because it more than runs a real risk of large-scale default by drastically reducing the liquidity of convertible issues .
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Note added at 2 hrs (2008-07-21 10:04:52 GMT)
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The widening of credit spread runs a risk by reducing the liquidity of convertible issues.
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Note added at 14 hrs (2008-07-21 22:05:50 GMT) Post-grading
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Sorry, I was not at my computer this afternoon.
My understanding is that investors usually want credit spread to narrow.
If it widens then then this implies higher risk in the convertible securities market.
You can find explanantions of credit spread on wikipedia etc.
http://www.etfexpert.com/etf_expert/2007/07/this-morning-a-....
The widening of credit spreads is the greatest risk because it more than runs a real risk of large-scale default by drastically reducing the liquidity of convertible issues .
--------------------------------------------------
Note added at 2 hrs (2008-07-21 10:04:52 GMT)
--------------------------------------------------
The widening of credit spread runs a risk by reducing the liquidity of convertible issues.
--------------------------------------------------
Note added at 14 hrs (2008-07-21 22:05:50 GMT) Post-grading
--------------------------------------------------
Sorry, I was not at my computer this afternoon.
My understanding is that investors usually want credit spread to narrow.
If it widens then then this implies higher risk in the convertible securities market.
You can find explanantions of credit spread on wikipedia etc.
http://www.etfexpert.com/etf_expert/2007/07/this-morning-a-....
Note from asker:
| "the widening of credit spreads (...) runs a real risk" - how is it possible for widening of credit spread to run a risk? |
| Sorry - I don't understand, maybe because I am not a native English speaker. I understand how an investor, company or porfolio can run a risk - but how can "widening of credit spread" run a risk? What does it imply? |
| Thanks for your efforts |
Discussion