BlackRock Proposes Bond Standardization to Enhance Liquidity

By June 21, 2013Economy

For corporate treasurers from U.S. manufacturing companies, liquidity means everything. As the keepers of the cash flow, corporate treasurers rely on liquid markets for achieving the investment and financing needed to keep a company running smoothly. Therefore, when reports of “patchy” liquidity in the corporate bond market emerge, manufacturers take notice.

BlackRock recently came out with a report called “Setting New Standards: The Liquidity Challenge II” which highlights a potential for liquidity problems in the corporate bond market as interest rates begin to rise. Blackrock proposes bond standardization — issuing similar amounts and maturities at set times, and more frequent re-opening of issues — as a liquidity driver.

According to the report, standardization may benefit investors who want lower transaction costs and to move quickly in and out of positions, though they may have to give up new issue gains and liquidity strategies. While issuers may lose flexibility through standardization, they could potentially benefit from lower issuance costs over time. To read more about the BlackRock report, click here.

 

Christina Crooks

Christina Crooks is Director, Tax Policy for the National Association of Manufacturers, where she is responsible for providing NAM members with important updates on tax policy, pensions, and corporate finance and management issues and representing the NAM’s position on these issues before Congress and the Administration. Within the NAM tax policy portfolio, Christina focuses on the R&D tax credit and tax extenders, and serves as the Executive Secretary for the R&D Credit Coalition and a leader in the Broad Tax Extenders Coalition.

Before joining the NAM, Crooks served as senior manager of government affairs for Financial Executives International, where she advocated on behalf of the association’s membership of senior-level business executives on tax, corporate treasury, pension and benefit issues. Previously, she worked as a legislative assistant to Rep. Michael Castle (R-DE), a senior member of the House Committee on Financial Services. Christina handled financial services issues for the Congressman during consideration of the Dodd-Frank Act, and also worked on small business and judiciary issues. Christina earned a B.A. in Political Science from the University of Delaware and a M.A. in Political Science from American University.

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