Editor's letter

Many different qualities make up a successful investor, but during this period of heightened political acuity, an aphorism from our twenty-eighth president, Woodrow T. Wilson, resonates especially true: all things come to him who waits—provided he knows what he is waiting for.

Nothing bears out this truism more than a recent research report by US Credit columnist and high-yield guru Martin Fridson, which studied the secondary market performance of roadshow deals in the high-yield market versus so-called drive-bys.

Between 2002 and the summer of this year, Fridson found that a week after issuance, drive-by transactions had widened 4.9 basis points relative to the Lehman Brothers US Corporate High Yield Index while roadshow deals narrowed 16.4 basis points. And four weeks after issuance, the drive-bys had widened by 11.3 basis points versus the index while the roadshow deals tightened 13.9 basis points.

And since drive-bys tend to be the modus operandi of the highly rated company that wants to make a quick foray into the market, President Wilson’s advice—to know what it is you are waiting for—rings all too true.