Wall Street Journal 08_04_2020

B10| Wednesday, April 8, 2020 THE WALL STREET JOURNAL.

NetYTD
Fund NAV Chg %Ret
American Century Inv
Ultra 46.32 -0.14-11.2
American Funds Cl A
AmcpA p 28.36 -0.04-15.5
AMutlA p 36.23 -0.13-16.2
BalA p 25.50 -0.02-10.2
BondA p 13.53 +0.02 4.0
CapIBA p 53.47 -0.02-14.7
CapWGrA 42.17 +0.07-18.9
EupacA p 43.78 +0.56-21.3
FdInvA p 49.97 +0.06-19.1
GwthA p 44.24 -0.05-13.5
HI TrA p 8.54 +0.10-13.8
ICAA p 32.68 +0.03-17.0
IncoA p 19.56 +0.01-15.1
N PerA p 39.37 +0.09-16.7
NEcoA p 38.56 -0.07-15.7

NetYTD Fund NAV Chg %Ret NwWrldA 56.16 +0.49-20.4 SmCpA p 45.59 +0.10-22.5 TxExA p 12.97 +0.05 -2.1 WshA p 38.75 -0.06-19.0 Baird Funds AggBdInst 11.35 +0.01 1.9 CorBdInst 11.53 +0.02 0.4 BlackRock Funds HiYldBd Inst6.50 ...-15.1 BlackRock Funds A GlblAlloc p 17.08 ...-11.1 BlackRock Funds Inst MultiAstIncome9.63 ...-11.2 StratIncOpptyIns9.33 ... -5.7 StratMuniOppI10.65 +0.05 -9.0 Bridge Builder Trust CoreBond 10.53 +0.01 1.8

NetYTD Fund NAV Chg %Ret CorePlusBond10.09 +0.02 ... Intl Eq 9.46 +0.04-21.1 Del Invest Instl Value 16.87 +0.04-24.1 Dimensional Fds 5GlbFxdInc 10.75 ... 0.2 DFARlEst 31.39 +0.20-22.9 EmgMktVa 20.41 +0.30-28.9 EmMktCorEq16.16 +0.22-25.6 IntlCoreEq 10.13 +0.11-26.5 IntSmCo 13.39 +0.25-29.2 IntSmVa 13.06 +0.23-32.5 TAUSCoreEq215.35 +0.06-23.5 US CoreEq120.01 +0.05-22.4 US CoreEq217.99 +0.07-23.7 US Small 23.44 +0.10-32.8 US SmCpVal21.05 +0.32-38.7

Tuesday, April 7, 2020

Top 250 mutual-funds listings for Nasdaq-published share classes by net assets. e-Ex-distribution.f-Previous day’s quotation.g-Footnotes x and s apply.j-Footnotes e and s apply.k-Recalculated by Lipper, using updated data.p-Distribution costs apply, 12b-1.r-Redemption charge may apply.s-Stock split or dividend.t-Footnotes p and r apply.v-Footnotes x and e apply.x-Ex-dividend.z-Footnote x, e and s apply.NA-Not available due to incomplete price, performance or cost data.NE-Not released by Lipper; data under review.NN-Fund not tracked.NS-Fund didn’t exist at start of period.

Mutual Funds Fund NAV Chg %RetNetYTDFund NAV Chg %RetNetYTDFund NAV Chg %RetNetYTDFund NAV Chg %RetNetYTDFund NAV Chg %RetNetYTDFund NAV Chg %RetNetYTDFund NAV Chg %RetNetYTD

US TgdVal 14.15 +0.23-38.6 USLgVa 27.13 +0.26-29.3 Dodge & Cox Balanced 80.49 +0.35-19.3 Income 13.86 +0.06 -0.3 Intl Stk 30.61 +0.40-29.8 Stock 138.64+0.55-27.0 DoubleLine Funds CoreFxdIncmI NA ... NA TotRetBdI NA ... NA Edgewood Growth Instituti EdgewoodGrInst34.79 -0.39 NA Fidelity 500IdxInstPrem92.70 -0.15-17.2 Contrafund K612.71 -0.07-12.1 ExtMktIdxInstPre46.93 +0.29-27.9 IntlIdxInstPrem33.37 +0.11-22.3 MidCpInxInstPrem17.66 +0.15-25.3 SAIUSLgCpIndxFd14.29 -0.02-17.4 SeriesOverseas8.69 +0.04-19.4 SmCpIdxInstPrem14.42 +0.01-31.4 TMktIdxInstPrem73.40 -0.03-19.0 USBdIdxInstPrem12.29 +0.02 3.9 Fidelity Advisor I NwInsghtI 27.38 -0.07-16.3 Fidelity Freedom FF2020 14.38 +0.04-11.3 FF2025 12.50 +0.04-12.7 FF2030 15.20 +0.06-14.8 Freedom2020 K14.37 +0.05-11.3 Freedom2025 K12.48 +0.04-12.7 Freedom2030 K15.18 +0.05-14.7 Freedom2035 K12.38 +0.05-17.9 Freedom2040 K8.53 +0.03-19.4 Fidelity Invest AMgr50% 16.58 +0.05-10.8

Balanc 21.38 +0.02-12.6 BluCh 94.65 -0.09-12.1 Contra 11.99 -0.06-12.0 ContraK 12.01 -0.06-11.9 CpInc r 8.34 +0.10-17.8 GroCo 19.13 -0.19-10.4 GrowCoK 19.16 -0.20-10.4 InvGrBd 11.56 +0.02 0.7 LowP r 36.70 +0.47-26.7 Magin 9.00 -0.07-11.8 OTC 11.30 -0.04-11.6 Puritn 20.39 -0.06-10.0 SrsEmrgMkt16.09 +0.21-22.0 SrsGlobal 10.26 +0.07-22.1 SrsGroCoRetail15.93 -0.17-10.3 SrsIntlGrw 14.72 -0.01-16.0 SrsIntlVal 7.21 +0.04-27.2 TotalBond 10.81 +0.04 -0.2 Fidelity SAI TotalBd 10.32 +0.03 -0.9 U.S.TreBdIdx10.90 -0.02 8.6 First Eagle Funds GlbA 48.28 +0.16-16.7 FPA Funds FPACres 27.11 +0.27-19.9 Franklin A1 CA TF A1 p 7.39 +0.04 -2.6 IncomeA1 p 1.94 +0.01-15.9 FrankTemp/Frank Adv IncomeAdv 1.93 +0.02-15.6 FrankTemp/Franklin A RisDv A p 56.82 -0.14 NA FrankTemp/Franklin C Income C t 1.97 +0.01-15.9 FrankTemp/Temp Adv GlBondAdv p9.99 -0.02 NA

Guggenheim Funds Tru TotRtnBdFdClInst27.77 -0.01 3.1 Harbor Funds CapApInst 67.63 -0.41-10.7 Harding Loevner IntlEq 19.46 +0.17 NA Invesco Funds A EqIncA 8.34 +0.04-18.5 Invesco Funds Y DevMktY 35.92 +0.38-21.2 JPMorgan I Class CoreBond 12.03 ... NA EqInc 15.08 +0.02 NA JPMorgan R Class CoreBond 12.05 ... NA CorePlusBd 8.43 +0.01 NA Lord Abbett A ShtDurIncmA p3.96 +0.01 -5.1 Lord Abbett F ShtDurIncm 3.96 +0.01 -5.1 Lord Abbett I ShtDurInc p 3.96 +0.01 -5.1 Metropolitan West TotRetBd 11.15 +0.02 2.5 TotRetBdI 11.14 +0.01 2.5 TRBdPlan 10.48 +0.01 2.5 MFS Funds Class I ValueI 34.84 -0.01-21.6 MFS Funds Instl IntlEq 22.46 +0.23-19.4 Nuveen Cl I HYMunBd 15.67 +0.14 NA Oakmark Funds Invest OakmrkInt 16.02 +0.36-35.8 Old Westbury Fds LrgCpStr 12.19 +0.01-19.1 PGIM Funds Cl Z

TotalReturnBond NA ... NA PIMCO Fds Instl AllAsset NA ... NA TotRt 10.53 ... NA PIMCO Funds A IncomeFd 10.99 +0.07 NA PIMCO Funds I2 Income 10.99 +0.07 NA PIMCO Funds Instl IncomeFd 10.99 +0.07 NA Price Funds BlChip 110.12-0.38-11.4 DivGro 44.33 -0.14-16.6 EqInc 23.30 +0.08-26.9 EqIndex 70.64 -0.12-17.3 Growth 63.65 -0.08-13.2 HelSci 71.52 -0.87-12.2 InstlCapG 38.71 -0.02-12.1 IntlStk 14.81 +0.06-20.5 MidCap 75.72 +0.42-20.6 N Inc 9.36 +0.01 -2.9 NHoriz 52.42 -0.14-11.7 OverS SF r 8.55 +0.02-23.6 R2020 19.23 +0.04-12.9 R2025 15.19 +0.03-14.6 R2030 21.75 +0.05-16.0 R2035 15.76 +0.04-17.2 R2040 22.16 +0.05-18.1 Value 28.81 +0.06-24.0 PRIMECAP Odyssey Fds AggGrowth r34.91 -0.07-22.2 Growth r 31.50 -0.04-23.1 Putnam Funds Class A StDurInc 9.91 ... -0.9 Schwab Funds S&P Sel 40.87 -0.07 NA

TSM Sel r 45.34 -0.02 NA TIAA/CREF Funds BdIdxInst 11.41 +0.01 3.4 VANGUARD ADMIRAL 500Adml 245.54-0.39-17.3 BalAdml 34.95 -0.01-10.2 CAITAdml 11.89 +0.04 -1.0 CapOpAdml r125.66-0.19-20.3 EMAdmr 28.82 +0.34-21.9 EqIncAdml 62.57 -0.07-20.6 ExplrAdml 72.04 +0.43-25.9 ExtndAdml68.85 +0.42-27.9 GNMAAdml10.87 +0.01 3.7 GrwthAdml83.04 -0.35-11.3 HlthCareAdml r77.05 -0.67 -9.7 HYCorAdml r5.24 +0.05-10.8 InfProAd 26.86 -0.06 3.8 IntlGrAdml 88.77 +0.79-13.6 ITBondAdml12.07 ... 2.9 ITIGradeAdml9.85 +0.01 -0.6 LTGradeAdml11.04 +0.09 2.4 MidCpAdml167.58+1.32-23.7 MuHYAdml11.11 +0.06 -4.5 MuIntAdml14.21 +0.05 -1.1 MuLTAdml 11.61 +0.06 -1.7 MuLtdAdml10.96 +0.02 -0.6 MuShtAdml15.76 +0.01 -0.1 PrmcpAdml r115.95-0.54-19.6 RealEstatAdml99.24 +0.79-24.0 SmCapAdml55.49 +0.35-29.8 SmGthAdml53.09 -0.02-23.9 STBondAdml10.74 ... 2.2 STIGradeAdml10.52 +0.01 -1.3 TotBdAdml11.36 ... 3.5 TotIntBdIdxAdm22.55 -0.09 -0.1 TotIntlAdmIdx r22.97 +0.16-22.9 TotStAdml 64.32 -0.03-18.9

TxMCapAdml135.73-0.09-17.7 TxMIn r 10.84 +0.06-23.0 USGroAdml99.68 -0.60-10.5 ValAdml 35.77 +0.08-22.8 WdsrllAdml50.09 +0.05-22.5 WellsIAdml61.53 +0.04 -6.3 WelltnAdml65.16 -0.10-12.3 WndsrAdml53.24 +0.60-26.4 VANGUARD FDS DivdGro 25.91 -0.16-15.1 INSTTRF202021.79 +0.02 -9.6 INSTTRF202521.83 +0.03-11.7 INSTTRF203021.75 +0.03-13.4 INSTTRF203521.66 +0.04-15.1 INSTTRF204021.56 +0.05-16.7 INSTTRF204521.41 +0.05-18.2 INSTTRF205021.44 +0.05-18.2 IntlVal 28.15 +0.15-25.0 LifeCon 19.45 +0.01 -7.1 LifeGro 30.33 +0.07-16.1 LifeMod 25.49 +0.03-11.7 PrmcpCor 21.71 -0.01-22.2 STAR 24.13 +0.07-11.7 TgtRe2015 14.19 +0.01 -6.5 TgtRe2020 29.39 +0.02 -9.7 TgtRe2025 17.51 +0.02-11.7 TgtRe2030 31.56 +0.05-13.4 TgtRe2035 19.13 +0.04-15.1 TgtRe2040 32.60 +0.07-16.7 TgtRe2045 20.20 +0.05-18.2 TgtRe2050 32.53 +0.07-18.2 TgtRet205535.32 +0.08-18.2 TgtRetInc 13.28 ... -5.1 TotIntBdIxInv11.28 -0.04 ... WellsI 25.40 +0.02 -6.3 Welltn 37.73 -0.06-12.3

WndsrII 28.23 +0.03-22.5 VANGUARD INDEX FDS MdCpVlAdml43.05 +0.52-29.7 SmValAdml38.32 +0.49-34.7 TotBd2 11.28 ... 3.1 TotIntl 13.74 +0.10-22.9 TotSt 64.31 -0.02-18.9 VANGUARD INSTL FDS BalInst 34.96 -0.01-10.2 DevMktsIndInst10.85 +0.06-23.0 DevMktsInxInst16.96 +0.09-23.0 ExtndInst 68.85 +0.43-27.8 GrwthInst 83.04 -0.35-11.3 InPrSeIn 10.94 -0.03 3.8 InstIdx 237.28-0.37-17.2 InstPlus 237.29-0.37-17.2 InstTStPlus55.03 -0.02-18.9 MidCpInst 37.02 +0.29-23.7 MidCpIstPl182.57+1.44-23.7 RealEstaInstl15.36 +0.12-24.0 SmCapInst 55.49 +0.35-29.8 STIGradeInst10.52 +0.01 -1.3 STIPSIxins 24.75 ... 0.2 TotBdInst 11.36 ... 3.5 TotBdInst211.28 ... 3.2 TotBdInstPl11.36 ... 3.5 TotIntBdIdxInst33.84 -0.13 ... TotIntlInstIdx r91.87 +0.66-22.9 TotItlInstPlId r91.89 +0.67-22.9 TotStInst 64.34 -0.02-18.9 ValueInst 35.76 +0.07-22.9 WCM Focus Funds WCMFocIntlGrwIns16.10 +0.07-14.9 Western Asset CoreBondI NA ... NA CorePlusBdI11.66 +0.06 NA CorePlusBdIS11.66 +0.06 NA

Data provided by

NOTICE TO READERS Due to extreme market activity and delayed reporting of closing prices from the sources, some NAVs may reflect previous day’s trading. Up-to-date mutual-fund data can be found online atWSJMarkets.com.

The country will use some proceeds of the $4.3 billion sale to fund coronavirus recovery efforts.

FULLY HANDOKO/EPA/SHUTTERSTOCK

BYFRANCESYOON
ANDAVANTIKACHILKOTI

Indonesia Deal Shows Renewed Interest in Risky Debt

BANKING & FINANCE

ment bonds in particular, thanks to bond-buying programs the ECB has introduced that the SNB hasn’t. Two-year and 10-year Swiss bond yields have risen higher than those on rival German bonds for the first time in more than a decade. A 10-year Swiss government bond yields minus 0.27%, compared with minus 0.97% on March 9. That is now 0.10 percentage point higher than comparable German bonds, which sport the lowest yields among major economies. Japanese yields were the world’s lowest for a time in 2018. The yield on the 10-year U.S. Treasury note settled Tuesday

at 0.735%, up from 0.675% Monday. Yields, which rise when bond prices fall, have climbed for two sessions in a row, reflecting a shift among investors toward riskier assets such as stocks. The increase in yields in Switzerland is attracting demand for the Swiss franc, causing it to rise to its highest level against the euro since July

It fell slightly on Tuesday,
but remains near recent highs,
with €1 buying 1.05 Swiss
francs.
To prevent the franc from
rising too quickly and causing
damage to the export-depen-
dent Swiss economy, the SNB
appears to have stepped up its

weekly interventions in the currency markets. The past two weeks saw an 18 billion Swiss franc ($18.4 billion) increase in the SNB’s so-called sight depos- its, a proxy that analysts use to measure currency intervention. That was the biggest jump since January 2015. At its March meeting, the Swiss National Bank said it was intervening in the foreign- exchange market after coronavirus fears had sent the franc up to become “more highly valued.” Complicating Switzerland’s position are complaints from the Trump administration about how it manages its currency. In January, Washington

added Switzerland to its watch list of potential currency ma- nipulators. Some think Switzerland isn’t acting more aggressively than it otherwise would. “Normally you want a weaker exchange rate because it leads to more exports, but nobody is buying” those exports right now, said Steven Englander, head of global G-10 FX research and North America macro strategy at Standard Chartered. “Had we been at these levels six months ago, they probably would have been much more concerned.” The SNB has long acted to keep the Swiss franc from be- coming too highly valued. With

already deeply negative rates, currency intervention is its most effective tool to stem the rise as investors seek safe assets. It isn’t clear if the differences in bond yields will prompt further action from the SNB. The bank abandoned a currency cap it maintained against the euro in 2015, allowing the franc to shoot higher suddenly, whipsawing global markets. Given the wider mayhem in currency markets, the franc’s trading against the euro has been “remarkably stable” in recent weeks thanks to the SNB’s interventions, said Karsten Linowsky, head of foreign exchange and rates strategy at Credit Suisse.

Switzerland’s bond yields
have shot higher than those of
Germany for the first time in
years, causing the financial ha-
ven to lose its long-held posi-
tion as the economy with the
world’s lowest borrowing costs.
Yields on Swiss
government bonds
are still in negative
territory but have
risen sharply in recent weeks,
as the Swiss National Bank’s re-
sponse to the coronavirus pan-
demic has been less aggressive
than efforts by the European
Central Bank and the U.S. Fed-
eral Reserve. Investors are pay-
ing up for eurozone govern-

BYCAITLINOSTROFF

German Bonds Surge Past Switzerland’s

CREDIT
MARKETS

How many Indonesian rupiah $1 buys

Sources: FactSet (CDS); Tullett Prebon (rupiah)

*Premiums for five-year credit-default swaps. Note: Currency scale inverted to show a weakening rupiah.

12,000

18,000

16,000

14,000

Oct. 2019 2020

Indonesia'screditrisk,as measuredbycreditderivatives, soaredasitscurrencytumbled. Cost to insure $10 million of Indonesia's dollar debt* $300,000

0

100,000

200,000

Oct. 2019 2020

In a Test, Qatar Sells $10 Billion in Bonds

Qatar sold $10 billion in U.S. dollar-denominated bonds on Tuesday, the first Persian Gulf state to tap the debt markets since the pandemic and a collapse in oil prices. The sale, a test of demand among investors for further bonds from other oil- exporting Gulf countries, came after Saudi Arabia last month launched an oil-price war with Russia, causing a collapse in prices and driving up the cost of borrowing. Qatar’s three-tranche bond sale received $44 billion in orders, according to a doc- ument from one of the banks on the deal. It indicates a re- covering investor appetite for risk after a recent selloff. Qatar didn’t respond to a request for comment. “This is a significant tail- wind for the region,” Meno Stroemer, fund manager at Switzerland-based Fisch As- set Management, said of Qa- tar’s successful sale. On Tuesday, Qatar sold U.S. dollar-denominated bonds in tranches of five, 10 and 30 years. It priced the 5- year tranche at 300 basis points over U.S. Treasurys, the 10-year at 305 basis points over U.S. Treasurys and the 30-year at a yield of 4.4%. The 10-year priced 35 basis points higher than bonds of similar maturities already in the market. —Rory Jones

Indonesia sold $4.3 billion of
bonds, including one it won’t
pay off for 50 years, in the lat-
est sign that investors are re-
gaining their appetite for risk.
Just last month, investors
were selling assets of all stripes
so aggressively that some mar-
kets seized up under the stress.
Even supersafe U.S. Treasurys
were dumped in an attempt to
raise cash. Now, investors are
willing to tie up their money,
even in debt issued by an
emerging market where credit
concerns have shot higher and
the currency has tumbled.
The Middle East’s gas-pro-
ducing Qatar also sold bonds
Tuesday, and a number of com-
panies, including some with
riskier credit ratings, have sold
new debt in the U.S. Alan Roch,
head of Asia bond syndication
for Standard Chartered Bank,
said the Indonesian deal has
spurred other emerging-market
governments to test the market
after being shut out by weeks
of volatility.
While Indonesia paid a
higher price to borrow than
earlier in the year, its outright
interest costs weren’t much
changed given the sharp drop
in benchmark Treasury yields.
“The market is more ner-
vous because of the virus, but
you’re able to get coupon levels
that remain very attractive,”
Mr. Roch said.
Many emerging-market gov-
ernments will need to raise
fresh funds in the coming
months as they struggle to
cope with the economic impact
of the coronavirus pandemic
when low commodity prices
and lockdowns across much of

the globe are weighing on reve- nues. Countries that tap investor demand before a rush of issu- ances could have an advantage, according to Zeina Rizk, execu- tive director at Arqaam Capital in Dubai. “But there’s a thin line between being brave and being desperate,” said Ms. Rizk, who bid for the Qatari debt Tuesday. The pandemic is set to raise the global debt burden dramat- ically in 2020, analysts at the Institute of International Fi- nance warned this week, with gross government issuance reaching a high of over $2.1 trillion in March. Indonesia will use part of

the proceeds to fund its coronavirus relief and recovery efforts, including support for small- and medium-size enter- prises and welfare benefits for the poor, according to a banker who worked on the deal. The country has reported 2,491 in- fections and 209 deaths, according to data compiled by Johns Hopkins University. Investors have recently grown more skeptical about In- donesia’s financial position. The cost of insuring Indonesian dollar debt against default has soared, according to FactSet. It costs about $241,000 a year to insure $10 million of Indone- sian debt against default, up from about $60,000 in mid-

February. The Indonesian rupiah has tumbled against the dollar, weakening more than 15% this year. Moody’s Inves- tors Service, S&P Global Rat- ings and Fitch Ratings each rate Indonesia’s bonds two steps above junk. On Monday, Indonesia sold $1.65 billion each of bonds ma- turing in 10-and-a-half years and 30-and-a-half years, and a $1 billion 50-year bond. Such long-dated debt from emerging markets is rare but not unprec- edented—Argentina has issued 100-year securities. Indonesia’s shortest-dated bond was priced to yield 3.9%, representing a premium of about 3.23 percentage points over Treasurys. In

contrast, the country sold a 10- year dollar bond in January with a coupon of 2.85%. Emerging-market governments issued just $20.26 billion of fresh debt in March as the markets rout deepened, according to Dealogic data, down from $100.05 billion in January and $62.43 billion in March

But that figure is now
picking up with emerging-mar-
ket governments raising $11.60
billion in the first week of
April. Panama and Israel both
issued fresh debt in late March,
according to Dealogic data. On
Tuesday, the state-run Korea
Development Bank was selling
a three-year floating-rate U.S.
dollar bond.

riskier junk-rated debt have completed just a handful of deals since March 23. And one large exchange-traded fund tracking the high-yield bond market, the iShares iBoxx High Yield Corporate Bond Fund, in the first quarter slumped to post its worst quarterly performance since 2008. Though it has rebounded slightly in recent days, the average cost over Treasurys for companies with junk-rated debt to borrow is near its highest since the financial crisis of 2008. “It’s very difficult for the Fed to help high-yield [bonds] because the Fed is not supposed to take credit risk,” said Hans Mikkelsen, head of U.S. high- grade credit strategy at Bank of America. Mr. Mikkelsen’s team has been recommending investors purchase what the Fed buys in the short term, reason- ing that debt issued by companies that have access to the Fed’s credit facilities will

bounce back before debt issued by lower-rated companies. Leveraged loans, a cousin of junk bonds that have been among the most popular invest- ments in recent years, also have struggled. Individual investors and hedge funds alike have dumped the debt in recent weeks in anticipation of a surge of corporate defaults. To some extent, such divides are expected, analysts say. And in time, the Fed’s support for safe markets could flow through to riskier ones. During the last financial crisis, the Fed bought up Treasurys and safe mortgage-backed securities, eventu- ally helping private investors to become more comfortable lending to riskier borrowers such as junk-rated companies. But since the last crisis, the financial ecosystem has changed. More lending is done by nonbank entities that don’t have a financial cushion to keep lending when markets turn

stormy and investors seek shel- ter. At the same time, many companies, individuals and governments have become more re- liant on functioning debt markets to remain solvent. “If it gets much worse for the U.S. economy and markets, then some of these programs

are going to be used for all kinds of asset classes,” Mr. Mik- kelsen said. Some industry trade groups, watching the divide between markets, are already pushing to get the Fed to buy more types of assets. One place this is hap- pening is in the mortgage mar-

ket, where a gap is forming between mortgage bonds backed by the government and those that aren’t. The Fed has begun buying a massive stockpile of the former, propelling a rebound in that market. But it hasn’t intervened in the latter market, leaving it effectively closed for business. Lenders that specialize in nongovernment-backed mortgages, many of which are independent nonbank companies, are now pausing operations and laying off staff, limiting the availability of these mortgages to some home buyers and owners. Some real-estate investment trusts with big portfolios of nongovernment-backed mortgage bonds have been particu- larly hard hit, forcing them to sell into a down market.New Residential InvestmentCorp. said last week that it sold $6.1 billion worth of these mortgage bonds.Two Harbors Invest- mentCorp., another REIT, said

in March that it also sold its en- tire portfolio of these mortgages. Many REITs have struggled to meet requirements from their banks to post more collat- eral against their loans. The Structured Finance As- sociation, a trade group, asked the Fed in March to increase its asset-backed-lending facility to support these nonagency mortgages and other types of asset- backed bonds. Another part of the mortgage market that has struggled without Fed support is a niche type of securities issued by government mortgage corporations Fannie MaeandFreddie Mac. Since 2013, the two firms have packed up the credit risk tied to mortgages they back and sold it to investors as bonds. Since the market turmoil began, the premium that investors demand to own those bonds spiked, according to data from MSCI Inc. —Matt Wirz contributed to this article.

the Fed said March 23 that it
would launch facilities to buy
not just Treasurys but also cor-
porate bonds carrying invest-
ment-grade ratings, the corpo-
rate-debt market showed signs
of stabilizing. Companies rang-
ing fromMastercardInc. to
NikeInc. toPfizerInc. were
able to issue bonds at lower
yields than their initial guid-
ance, a sign that investor appe-
tite for the debt had improved.
Over the following two weeks,
companies issued a record $177
billion of investment-grade
bonds, according to Dealogic.
In contrast, companies with

Continued from page B1

Market

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Some markets remain closed, setting off a race to stay afloat.

Wall Street Journal 08_04_2020

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