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Author: NissNiss One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35392  
Subject: Junk bond spreads Date: 8/18/2001 3:35 PM
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I hadn't dealt much with junk bonds in the past, but have been forced into the market by my "broker" who had convinced me to sell Federal Agencies for some XOXO and LVLT bonds. This is a relatively small part of my IRA but still disturbing as I've done much better on my own with US, Agencies and top corporate strategy.

Anyway, after reviewing, I figured I'd average down on the XOXO 0% which were selling at about 14, at the time on my statement, down from my adjusted cost of 77. The response from my friendly broker was that the current market was 16-18 and that his house had to get a point. So I could buy, at 19, a bond that could only be sold for 16.

When I questioned the huge spread percentage wise, he indicated there was nothing he could do. I wondered what the value of his vaunted bond analysis desk when they kept me in a bond that went from 77 to 14.

Any suggestions?
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