However, when individual investors decide to take their money out of a bond fund, the portfolio manager may be forced to sell bonds at less than desirable prices to give them back their money.
So, just as a company's need for cash was growing, and its sources were drying up, there was a threat of being forced to repay the bonds.
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In 2001, in a desperate effort to stave off debt default, Domingo Cavallo, the economy minister, forced them to swap bonds (and cash) for long-dated or low-yielding paper.
Barring such an IMF debt roll-over, Russia would likely be forced to add sovereign bonds floated in Europe and the U.S. to their growing list of defaults. 3 More importantly, defaulting on IMF debt would effectively eviscerate what little remains of Russia's creditworthiness.
We saw this vicious cycle in junk bonds after Mike Milken was forced to suspend his activities as the market maker for the junk bond market.
Assume the Fed doesn't turn on the printing presses, Washington is nonetheless putting itself in a position to force banks to buy government bonds, just as it forced them to do its bidding with Chrysler and GM.
At Deauville, though, Mrs Merkel and Mr Sarkozy wanted default to become a possibility: current debt would be safe, they said, but leaders later agreed that from 2013 countries should issue new types of bonds that could be more easily forced to take a hit if a country ran into trouble.
Additionally, many mutual funds have been forced to sell their high quality, high yield bonds because of redemptions.
Financial firms were forced to prop up Daewoo by rolling over its bonds.
Turmoil in the credit markets and uncertainty over the firm's future has forced it to delay repeatedly the issue of new bonds.
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Ahead of the gathering, the yield on Spain's 10-year bonds surpassed the 7% level that forced Greece, Ireland and Portugal to accept bailouts.
Nobody forced the banks to package them together and sell them as bonds to an unsuspecting public.
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Hedge funds which had sold borrowed bonds in the hope that prices would fall were forced to buy them back.
And while ABN Amro dismisses the fight over DAF's collateral as an aberration, U.S. investors can expect more such disputes when banks are forced to choose between their own capital and that of customers who bought bonds from their securities arms.
The worst-case outcome for them is a forced separation not only of research, but of all trading in equities, bonds and derivatives from their corporate-advisory work.
They accelerated in the spring, when UBS shut down its Dillon Read hedge fund after losses in subprime bonds, and really hit a tone of urgency in June, when Bear Stearns, one of the biggest arrangers of mortgage bonds on Wall Street (and presumably, thus, an expert) was forced to shut down two of its hedge funds because of overwhelming redemptions and margin calls.
Now that the rating agencies are downgrading CDOs as well as the underlying mortgage-backed bonds that they reference, it seems all but certain that banks and others will be forced into another round of markdowns.
Many mutual funds and sovereign wealth funds (SWF) would instantly be forced to either change their investing covenants from AAA-only, to allow for the purchase of AA bonds.
The fund industry hopes that as Europeans are forced to think harder about their old age, many will come to see that safe investments such as bonds and bank deposits generate lower long-run returns than equities do.
Witnessing the consequences of the forced separation on the child, mother and family moved Fitzgerald to rededicate her life to repairing and strengthening broken bonds.
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