This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Market Vectors’ Fran Rodilosso On The Microsoft/Nokia Deal News And The Case For “Fallen Angels”

Monday’s announcement that Microsoft intends to purchase Nokia’s handset business and license the company’s patents for a total of $7.2 billion has provided a major boost to Nokia’s bonds and highlights the investment case for investing in “fallen angels,” according to Fran Rodilosso, Fixed Income Portfolio Manager at Market Vectors ETFs.

“It is expected that Nokia will continue to exist and will move to focus on its network equipment business,” said Rodilosso. “I believe it will still be in a very competitive space, but the cash infusion from this deal, should it be completed, will be a big credit positive for the company and highlights one of the investment theses behind focusing on fallen angels.”

“In this case, we are dealing with a long established player and brand name in the handset business which, despite its falling market share and worsening business prospects, still possesses attractive assets that hold significant value,” he continued. “Rated B+ on average by the major rating agencies, Nokia’s debt may soon be considered for potential upgrades based on the success of this deal, which is expected to close in early 2014.”

Rodilosso pointed to another significant telecommunications player and “fallen angel,” Sprint, which has experienced very positive credit events in the past 12 months as Japan’s Softbank emerged as the leading suitor of the company.

“Part of the attractiveness of fallen angel bonds is that the issuers, formerly investment grade companies, tend to be larger, more established players in their lines of business,” said Rodilosso. “While some of these companies continue to decline, there is often value to be tapped in brand names, patents, capacity and various other factors. It is also helpful from a bond investor’s perspective that often a major goal of management of these companies is to regain their investment grade status.”

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 17,596.35 -350.33 -1.95%
S&P 500 2,057.64 -43.85 -2.09%
NASDAQ 4,958.4680 -122.0370 -2.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs