We see an opportunity in MBS to add income while decreasing credit risk against a backdrop of ever -
tighter corporate bond spreads.
Not exact matches
This and
tight spreads — the gap between
corporate bond yields and that of comparable - maturity Treasuries — might mitigate any positive impact from the tax package.
The duration matched
spread to Treasuries or the OAS (Option Adjusted Spread) for both the S&P U.S. Issued Investment Grade Corporate Bond Index and the S&P U.S. Issued High Yield Corporate Bond Index are tighter by 16 and 33 basis points respect
spread to Treasuries or the OAS (Option Adjusted
Spread) for both the S&P U.S. Issued Investment Grade Corporate Bond Index and the S&P U.S. Issued High Yield Corporate Bond Index are tighter by 16 and 33 basis points respect
Spread) for both the S&P U.S. Issued Investment Grade
Corporate Bond Index and the S&P U.S. Issued High Yield
Corporate Bond Index are
tighter by 16 and 33 basis points respectively.
Spreads of the S&P Eurozone Investment Grade
Corporate Bond Index by rating category show that since mid-February 2016, the Option Adjusted
Spreads (OAS) are significantly
tighter for the AA, A, and BBB categories.
Further, though
spreads for GM and GMAC are not at historically
tight levels,
spreads in the
corporate bond market are at levels not seen since 1997.
As of Feb. 5, 2018, investment - grade
spreads had tightened 6 bps and were more than 110 bps
tighter compared with February 2016, as measured by the S&P 500 Investment Grade
Corporate Bond Index.
The best a
corporate bond manager can do is to play it safe with
spreads so
tight, and wait for a better day to take credit risk.