At the same time, issuers of premium credit cards are engaged in fierce competition, with airlines as partners, for customers who pay hefty annual fees for perks like priority boarding, free checked bags, bonus frequent flier miles — and airline lounge access.
Given the hysterical business headlines of the time, issuers also saw a hot IPO as a "branding event," but any benefit from such branding was extremely short-lived, Hambrecht says.
Germany is considering it, and France has been a long-time issuer.
Because most defaults historically have occurred in unrated securities of one-time issuers — mostly in the housing and health care sectors — one way to protect a portfolio is to focus on investment-grade bonds of well-established issuers.
Now, the question is whether high-yield investors are willing to move beyond corporate refinancings and buy the debt of first-time issuers, as well as bonds with fewer protections.
The resultant demand for yield "allows the most speculative grade of issuers access to the capital markets".Thus has the number of first-time issuers in the junk market surged: there have been 21 so far this year, and twice as many came to the market last year as the year before.
Companies will need to provide their potential investors with financial statements, but some first-time issuers and those seeking less than $500,000 will not be required to have the statements audited.
As is the case with all teaser rate cards, be sure to pay your bill on time since issuers can opt to increase your rate if a payment is received even one day late.
Whereas delinquencies in the credit-card industry as a whole are around 4-5%, those in the sub-prime market are almost twice as high, and can reach 15% in hard times.Obviously, issuers charge higher interest rates to compensate them for the higher risk of not being repaid.
Jolsons reports make an interesting disclosure: Montgomery Securities, its partners, employees and their families have a significant position in the shares of the issuer, which from time to time may exceed 5%.
OurHouse.com was replaced by Capital One, a major credit card issuer, in time for the Michigan-Auburn matchup on New Year's Day, with an option for 2002.
