credit mkts recovering as per target, page-9

Continued credit market improvement - especially in commercial paper :

Don't take my word for it..
As reported in todays' Business Week Online:

The Debt Market: Signs of Life; The jump in stocks may have grabbed the headlines, but a budding recovery in the credit market is the real good news by
Peter Coy and Mara Der Hovanesian


"The rapidity of the recovery in some hard-hit sectors is impressive. Take asset-backed commercial paper, which companies such as mortgage lenders issue to raise short-term funds. The market nearly melted down in August when buyers started worrying about the quality of the assets backing the debt, which can include subprime mortgages. Buyers refused to accept paper that matured in more than one day. Now companies are able to issue paper with maturities of up to six months. And the interest rates they pay are falling. From a high of 6.20% on Sept. 4, the yield on the top-rated paper with a one-day term fell to 5.27% on Sept. 19, a drop much greater than the decline in the federal funds rate.

The recovery has been less dramatic, but still significant, in the interbank lending market. At the height of the liquidity crisis in mid-August, even the biggest banks had to pay more for loans from each other because lenders couldn't gauge the risk of default. Meanwhile, investors fled to ultra-safe U.S. Treasury bills. That opened a gap of as much as 2.4 percentage points between the three-month interest rate known as the London Interbank Offered Rate, or LIBOR, and the lower yield on three-month T-bills. The gap, far wider than the typical half a percentage point, was a stark indicator of fear and doubt. But by Sept. 19, that yield spread had narrowed to 1.3 percentage points.

'A Little More Clarity'

Bidders are also gradually emerging in the obscure market for top-rated securities backed by credit-card receivables, with spreads vs. LIBOR narrowing to around 37 basis points vs. a crisis high of 50 and a good-times low of nearly zero, according to Jane L. Caron, chief economic strategist of Dwight Asset Management in Burlington, Vt. Investors are still shying away from the lower-rated parts of the market.

One clear indicator of recovery is that investors are making sharper distinctions between risky and less risky securities instead of trashing them all equally. "There's just a little more clarity out there now rather than people [acting] like deer in the headlights," says Frank Pallotta, a managing director in Morgan Stanley's (MS) fixed income division.

And while the damaged parts of the market are showing improvement, other sectors have never faltered. According to data collected by Thomson Financial (TOC), issuance of investment-grade corporate debt in August and the first half of September has continued at the same level as before the market crisis began -- in the range of $80 billion a month."

I can't tell you when rams will announce funding or when the instos will wade back into the stock but I can tell you it wont be trading at these levels in a couple of months time and is worth north of 1.50. A glorious opportunity to take advantage of fear and misunderstanding of the ABCP markets and make 100% upside.