00:00Do you think that's a temporary widening or is this a start of maybe a regime change?
00:05I think it is a little bit of a start of a new regime change.
00:07So you've seen a lot of issuance out of the tech companies, but it's just not about the dollars.
00:10It's also where they're issuing.
00:12And so a front end of the issuance is actually doing quite well.
00:15You take Google, for example.
00:16They issued, I think, at 27 basis points for the three years, so very tight spread.
00:19And now it's trading at 20 basis points over.
00:21So there's been a lot of demand for the front end because people know that that's money good.
00:25Out the curve, the quality is there, but there's just a lot of weight to it.
00:29So there's about 40% of the Google and the Oracle deal that were issued 20 years and longer.
00:34And that's very rare.
00:35Normally, you're getting these short bonds or spread across the curve.
00:37And then Google, obviously, we've been talking about it all week, that they issued 100 years over in Sterling.
00:41So there's just a lot of weight.
00:43And they're not the same dollar weight for 100 years as a two-year or a three-year.
00:47It just puts a lot more spread duration in your portfolio.
00:49It makes it a lot whippier.
00:50And so in that regard, I think you have to get paid more.
00:53And the more they want to issue out the curve, I do think the more pressure it's going to put
00:56on spreads, particularly within tech.
00:57Would you consider, Matt, taking on a 100-year risk from a tech company, even a tech company like Alphabet?
01:03I mean, we know insurance companies want the duration to match their liabilities.
01:07I love the 100 years.
01:08I love the 60 years.
01:09Only if you get paid, though.
01:10You have to get paid.
01:11It has to be a steep curve.
01:12If you're getting enough of a curve, enough of a pickup to it, it makes sense.
01:16And the reason why is because these are liquid bonds.
01:18You're getting paid a lot more, and you can sell them if things change.
01:21You really can't forecast a 30-year tech bond anyway.
01:23I have no idea what's going to happen in Google in the next month, let alone five years or 30
01:26years.
01:27But in the instance of the UK sterling bond for Google, it was a 60 basis point spread pickup.
01:33But uniquely enough, it was only a 10 basis point yield pickup because the 30-50 guilt curve is heavily
01:39inverted because of all the demand from pension plans in the UK.
01:42So it's just a really unique thing.
01:43But in my opinion, I don't mind it at all because I can sell it, but I've got to get
01:46paid for it.
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