Andrew Allentuck was kind enough to quote me in his recent Investment Executive piece, Some Bad Omens for Bonds:
Liquidity can be an issue for corporate issues as well. For example, an A-rated Canadian Utilities Ltd. issue due November 2022 was recently priced to yield 3.67%, a 100-bps spread over a federal issue of similar term. And of that 100-bps point spread, no more than 20 bps can be attributed to default risk, says James Hymas, president of Hymas Investment Management Inc., a specialty fixed-income investment firm in Toronto. As the credit rating declines, he adds, default risk rises, but the largest premium remains the illiquidity premium.