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Auto downgrades and the ripple effect
The credit market is still reverberating from the impact of Ford and General Motors’ loss of investment-grade status. The crossover of a name with as much debt as GM was always going to be ugly. The majority of investment mandates in the cash market make some reference to indices and give managers little option but to sell the bonds once they have fallen foul of index qualification rules. But what was not generally anticipated was how the positions being maintained by hedge funds would play into
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