High Yield Bonds

With banks and corporates breaking records for January bond issuance, Johnathan Owen looks at the drivers of the surge in supply and sounds a warning for investors on sharp pricing.

While yields have soared in recent months and created a broad buying opportunity in fixed income, Aza Teeuwen says investors should look at floating rate bonds to benefit from higher coupons today.

With projections for European growth and inflation being hastily revised in early 2023, the region’s bonds are still paying investors a premium that may not be around for long, says Dillon Lancaster.

With fixed income starting yields at their highest level for a decade, George Curtis expects increasing demand for investment grade bonds to boost the market as we enter 2023.

In our annual ‘Rodney Blog’, Eoin Walsh says that with rates now offering both yield and downside mitigation, and credit yields at near-decade highs, fixed income investors could enjoy strong returns in 2023

Credit metrics will continue to deteriorate in the next year or two, but European high yield bonds in particular are pricing in too severe a downturn, says Mark Holman

With some UK bank bonds now trading with higher yields than their counterparts in Turkey, Mark Holman questions whether the dumping of UK and sterling assets has gone too far.

While economic uncertainty in Europe is building, the healthy cash balances and low refinancing needs of Europe’s high yield bond issuers make a spike in defaults unlikely, says George Curtis.

With Europe facing an energy crisis and the UK bracing for a five-quarter recession, a strong allocation bias to the US seems a no-brainer. However, George Curtis says that when looking at relative value in fixed income, the decision is never that simple.

Pierre Beniguel explains why high yield issuers are selling new bonds at steep discounts to par value, and why this represents an opportunity to build potentially significant performance into fixed income portfolios going forward.

US banks remain bullish about the health of the consumer, but credit spreads are still pricing in not only a recession, but a fairly severe one. Are the banks wrong? Or have credit markets just backed up too far on negative fund flows?

With Heimstaden showing its commitment to corporate hybrids with a €600m tender offer, Pierre Beniguel looks at the complex decision issuers have to make and says more could follow suit with bonds trading at steep discounts.