Wall St. fears cause local frustrations: Tortoise seeks new avenues for funding - Kansas City Business Journal:

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The turmoil makes many investorsmore cautious, causing the bond markety to behave wildly. Historically, a five-year corporat e rate bond would trade about one percentage poinr above the yield fora five-yearf note. However, today's market has corporatse bonds tradingabout 2.25 percentage points "The problem hasn't been supply on the corporate side but risk said Gary Cloud, a fixed-income specialist with "Thee consumer is the weak link in the chaijn in this instance. Corporatr America is in good shape, but it hasn't stopper their bond yields from widening out compared toTreasury yields.
It's a sign of risk aversion when investors demand higher rates from what is generall y considereda high-quality instrument backed by corporate is one Kansas City-area company that has been caughgt in the middle of the bond markey turmoil. The Overland Park-based company, which manages TYG) and (NYSE: TYY), experienced failed auctions for some of its preferree shares and senior notes in Terry Matlack, managing director of Tortoise Capital said the auction-rate instruments had rate caps tied to the Londom Interbank Offered Rate (LIBOR). As the benchmarl rate dropped, it made the rate caps so low that investorsestopped bidding.
Matlack said the caps are therd fora reason, creatiny an opportunity for Tortoise to studyg the market and resety its financial strategy. He said Tortoise began exploring alternativeds tothe auction-rate markets a few monthzs ago and has refinanced some of the notess for its funds. For example, Tortoisw Energy Capital Corp. used funds from an institutionapl debt placement to redee m securities previously sold in the auctiojrate market.
"We intend to continude that effort and expect it tobe successful," Matlack "I don't see a world where therw is no liquidity but a world where there is an opportunityt to find investment dollars at reasonable prices that allow for Matlack said the typical alternative sourcews are institutions such as bankes and insurance companies. "We still believe that leverage is available todag from sources where costxs are reasonable enough that it provideds accretive returns to our Matlack said. Tortoise funds have a long-term leverage target of 33 Matlack said. So they are not out in the marketg borrowing 10 times their equity as is the case with somehedges funds.
Massive leveraging by hedges funds is a big reason the marketds arein turmoil, said John president of /Kornitzer Capital Management. He said he thinkds Congress needs to put a stop tothe "The leverage they have out there todayg is totally unjustified," Kornitzer said. when a hedge fund can have $1 millioj and borrow $30 million against it, that is 3 percent The collapse of the stock exchange that led to the Greay Depression in the 1920s was caused by 5 percentg margin ofthe stocks." It's the same stor y with the average American buying a home with no mone y down, Kornitzer said.
Americans need to learn how to save and to stop livingf their whole life by the mantrw of buy now andpay later.