Tag Archives: credit spreads
BBB Bond Downgrades Added USD 88 Billion to the High-Yield Bond Market YTD
In recent years, one noticeable development in the corporate bond market has been the rapid growth of the BBB bond market in terms of its absolute amount and relative share of investment-grade corporate bonds. We wrote a blog on this topic in May 2019 detailing the growth of the BBB bond market and its impact…
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Like the Virus, Credit Spreads Could Be at Risk of a Possible Second Wave
Ever since the Fed released its tsunami of credit, credit markets have rallied the most since the depth of the Global Financial Crisis. Continued central bank actions have driven the already existing trend toward demand for higher-yielding assets, helping companies issue debt with fewer lender safeguards and covenants. With the Fed willing to support the…
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As Volatility Returns to Equities, Corporate Bond Spreads Tighten Near Record Lows
Broad-based equity markets have been on a rollercoaster ride since Jan. 30, 2018, as market participants appear to be reassessing the impact of inflation and potential consequences from the recent tax reform. While volatility appears to be back, high-grade corporate bond spreads have tightened to levels not seen since 2007. Compared with the last episode…
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Looking for Incremental Yield
Over the past few years, corporations have taken advantage of the low interest rate environment and have thereby increased the size of the corporate bond market considerably. Many of these bonds, however, are subject to the effects of rising interest rates. In fact, anticipation of this change in interest rates alone has already started to…
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