Category Archives: Fixed Income

Are Leveraged Loans Losing Their Luster…or Poised to Shine?

Leveraged loans (also called senior loans or bank loans) typically pay a two-part coupon—a market-driven base rate (30-90 day LIBOR) plus a contractual credit spread.  As shown in Exhibit 1, the weighted average credit spread of U.S. leveraged loans, as measured by the S&P/LSTA Leveraged Loan 100 Index, has fallen steadily and now sits at Read more […]

Rieger Report: Corporate Junk Bonds – “Danger, Will Robinson!”

The bond markets are certainly not “Lost in Space”1. There is good rationale as to why the bond markets are in the position they are today; compressed spreads are the result of low rates coupled with strong demand out pacing supply for yield assets.   However, the homogenization of the US corporate bond markets is worrisome and should Read more […]

Rieger Report: Illinois G.O.s on the Edge

The recent ratings downgrades by both Moody’s and S&P Global Ratings have placed the State of Illinois general obligation bonds on the edge of becoming junk.  As of this writing, the ratings are Baa3/BBB-/BBB by Moody’s, S&P and Fitch. The fiscal struggle endured by Illinois has indeed been a long one, now yields for Illinois G.O.s have Read more […]

Asian Fixed Income: An Update on the Indian Bond Market

As of June 5, 2017, the yield of Indian sovereign bonds, as tracked by the S&P BSE India Sovereign Bond Index, stood at 7.03%—the second-highest sovereign bond yield among the Pan Asian countries, following that of Indonesia, at 7.09%. The yield of the S&P BSE India Sovereign Bond Index climbed 19 bps YTD as of Read more […]

Is Mexico Still Attractive to Foreigners?

In an environment of increasing rates, Mexico has not been left behind.  As seen in my last blog, since December 2015, Mexico’s Central Bank (Banxico) has increased the reference rate by 375 bps, with the last 25 bps being a surprise for analysts and the market on May 19, 2017.  I remember the days when Read more […]

Rieger Report: Infrastructure Bonds

With the President’s focus on the U.S. infrastructure this coming week it is a good time to look at the existing infrastructure bond markets.  Municipal bonds have long played a critical funding role in the U.S. infrastructure sector. The 19,000 tax-exempt municipal bonds tracked in the S&P  Municipal Bond Infrastructure Index mainly consist of investment grade bonds Read more […]

Canadian Update

Canada’s economy has been accelerating due to increased consumer spending and a rebound in business investment.  Consumer spending driven by vehicle purchases and real estate investment has lifted the economy, along with improved business investment.  The economy and its growth trend now appear to be on a more secure path.  As of May 31, 2017, Read more […]

Rieger Report: The World is Flat

There have been a myriad of articles with headlines and content about rising rates, the coming evisceration and other zombie apocalypse events in the bond markets.   There can be no doubt that yields for fixed income asset classes are low and there is also no doubt that rates will eventually be higher.  How, when and Read more […]

100 Days Later in Mexico

100 days…is it a milestone?  Is it a key number?  I’m not sure, but everybody looks like they love to write about it, so I will too.  What I know is in Mexico we have a saying that goes, “If the U.S. sneezes, Mexico gets a cold.”  Following Dennis Badlyans’s post “Does the Outperformance of Read more […]

Debt Rising

Outstanding household debt reached a new high in the 2017 first quarter, surpassing the level set in the 2008 third quarter when Lehman Brothers failed and the financial crisis arose. Despite worrisome comments in the press, there is no cause for concern.  First, default rates on mortgages, auto loans and revolving credit are as low Read more […]