S05 Cougars外文电子书籍.PDF

Harvard Business School 9-295-006 Rev. September 7, 1995 COUGARs On November 17, 1983, Josephine Baker received a prospectus from A.G. Becker Paribas regarding an offering of COUGARs (Certificate on Government Receiptssee Exhibit 1). Ms. Baker had worked for the fixed-income research department of Greenwich Mutual Funds for over a year, and while she had specialized in the U.S. Government Treasury market, she had never seen this type of offering. As the U.S. Government Treasury market was the largest and most vital segment of the U.S. debt markets, Ms. Baker was understandably dubious when the investment banks began touting these securities as revolutionary. Greenwich Mutual Funds managed over $50 billion, of which $20 billion was invested in fixed-income securities. More particularly, a $3 billion fund was dedicated to investing in U.S. government securities. At this time, the U.S. Treasury had $1.4 trillion in obligations outstanding and had raised $161 billion in 1983 alone. Since her arrival in Greenwich, the mutual fund business had grown increasingly competitive, with many new entrants competing for funds, particularly in the government market. As a result of this fierce competition, every basis point (1/100th of a percent point) of yield was vital for the advertising campaigns that would attract additional funds from investors. This pressure forced managers in the government market to become more creative in their search for new instruments and tactics to garner additional yield.