Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Steve Stelmach – FBR Capital
Steve Stelmach – FBR Capital
With regard to the reduction in the high yield how should we be thinking about that? Is that a reduction in terms of staffing, capacity, or is it less capital being committed on the desk. What did you do to reduce that debt exposure?
Debbra Schoneman
It’s a little bit of a combination of a couple things. One is its reduced capital associated with that. Then really changing the emphasis of where the staffing does spend their time and where their emphasis is placed for example there are taxable municipal products which has been increasing in the marketplace and so its really shifting those resources to where we feel its more tied in with our core municipal business and other project finance businesses.
Steve Stelmach – FBR Capital
On the media side I sort of hit on this every quarter but it sounds like there is always a pipeline developing it seems like you got some of that in this first quarter. Would you characterize the first quarter as seeing the benefits of that pipeline or is it simply just you’re doing business in more places?
Andrew Duff
It’s really a combination. On the one hand significant amount of our business historically looking back over year has been lower grade and/or non-rated non-investment grade. In that part of the marketplace it’s still essentially frozen, there’s very little activity as the thaw continues. Having said that, what you saw is our ability to fully make up for that and grow the business by the expansion we’ve taken in essentially new areas and new geographies.
Steve Stelmach – FBR Capital
If we think about the volume of deals in the first quarter is that pretty indicative of what you expect for the balance? I’m talking industry wide here not necessarily Piper specifically. Industry wide is that what you would expect for the balance of the year or do you still expect things to improve from here?
Andrew Duff
I think they can improve over time. Again, what we saw last fall, let’s say November, December, was almost a complete freeze in the municipal markets as well. Then at the turn of the year very high grade could access the market AAA, AA. We’ve now done things even as BBB charter schools BBB- I think it was actually and successfully got that done in the marketplace. As that continues over time I think you can see even higher volumes. Also the marketplace is largely digested the significant restructuring of the auction rate securities, not all of it but a large part of that is actually now done.
- To read the full transcript on Seeking Alpha, click here »
