Sentences with phrase «lower than investment grade bonds»

Consequently, high - yield bonds are rated lower than investment grade bonds.

Not exact matches

California's bonds are rated lower than those of any other state, but are still investment grade, and investors are still buying.

All else equal, unless it possesses some sort of major offsetting advantage that makes the risk of non-payment low, a company with a low - interest coverage ratio will almost assuredly have bad bond ratings, increasing the cost of capital; e.g., its bonds will be classified as junk bonds rather than investment grade bonds.

Investment grade bonds are considered to be lower risk and, therefore, generally pay lower interest rates than non-investment grade bonds, though some are more highly rated than others within the category.

The average investment - grade (high - yield) bond trades on less than 32 % (36 %) of days over the prior six months — liquidity in corporate bonds was considerably lower than in traditional listed equity markets.

In recent months, the yield on US corporate bonds, especially investment - grade securities, is a little more than 100 basis points compared to the yield on government debt, dropping within striking distance of the lows seen post the 2008 financial crisis.

Floating - rate loans» low credit ratings indicate greater potential risk of default relative to investment - grade bonds (though default rates for floating - rate loans historically have been lower than on high - yield bonds).

This is a market - based estimate of the amount of fear in the bond market Bass - rated bonds are the lowest quality bonds that are considered investment - grade, rather than high - yield.

The bottom line of Draghi's answers was that the ECB would only buy government bonds rated lower than investment grade if the countries are in a bailout programme and the programme is not in a review period.

Cons: The primary negative associated with investment grade floaters is that when issued they generally offer current yields that are significantly lower than a typical fixed rate bond of the same maturity offered by the same issuer.

Both investment - grade and lower - rated corporations sold more bonds last year than ever before.

A speculative - grade bond has a rating of lower than Baa, an investment - grade bond has a rating of Baa or higher.

With a «BBB» investment grade score and higher rates, this bond is very unlikely to make any sort of huge losses during its maturity period despite its lower rating than the two bonds mentioned above.

High yield, lower rated bonds involve a greater degree of risk than investment grade bonds in return for higher yield potential.

A junk bond or high - yield bond is a bond rated at «speculative» grade or at «less than investment grade,» likely BB or lower.

After all, the investment - grade bond market (represented in the table by the Bloomberg Barclays Aggregate bond index) posted the lowest annual return more often than any other asset class, nine times over this 20 - year stretch.

The holdings of emerging market bond funds typically range from relatively low risk BB + bonds (one notch lower than investment grade) to high - risk C issues.

Corporate bonds with low credit ratings are called high - yield bonds, because they have higher yields than investment grade bonds.

And while bond investors have suffered setbacks recently as yields have risen by more than a percentage point from their 2016 lows in part because of concerns that tax cuts and infrastructure spending in a Trump administration could spur inflation, the Bloomberg Barclays U.S. Aggregate bond index — a good proxy for the investment - grade taxable bond market — is actually up almost 2 % from the beginning of the year.

With lower return potential than stocks, overcoming the impact of management fees and trading costs in bonds should be more difficult, especially in the lower - yielding investment - grade arena.

Our research on the Fundamental Index ® concept, as applied to bonds, underscores the widely held view in the bond community that we should not choose to own more of any security just because there's more of it available to us.10 Figure 9 plots four different Fundamental Index portfolios (weighted on sales, profits, assets and dividends) in investment - grade bonds (green), high - yield bonds (blue) and emerging markets sovereign debt (yellow).11 Most of these have lower volatility and higher return than the cap - weighted benchmark (marked with a red dot).

The premium paid on CMBS rated BBB -, the lowest investment - grade level before junk, has tumbled 105 basis points over the last month, more than 10 times the spread compression of investment - grade corporate bonds, Edward Reardon and Simon Mui wrote in a note dated Aug. 2.

In October, U.S. Treasury yields declined 23 basis points on a year - over-year basis, while corporate debt on the low end of the investment grade spectrum increased more than 65 basis points, nearly a 90 basis point increase in the spread between U.S. Treasuries and the low - end of investment grade corporate bonds.