The yield curve on Dynegy's Baa3/BBB issues just inverted - or, better, I just noticed that it inverted--, meaning, the near-term issue (due '05) is now priced so that its yield is greater than the longer issues (due '11 and '12). For being in the same industry sector, it's getting beat up as part of the Enron/energy scams and scandels, plus some book cooking of their own --if I'm remembering right-- but I'm finding that yield inversions for corporate issues are highly predictive sign of troubles to come, such as rating house downgrades and then a collapse into Ch 11. By way of comparison, look at Delta's bonds, rated BA3/BB, another troubled industry. Their currently offered maturities run from '05 to '29, but the pricing yields a narrow and normal yield curve (i.e., later issues carry the slight premium that would be expected from duration/convexity.)Forewarned is forearmed, and with bonds, every edge has to be sized. Charlie
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