HYUP provides exposure to a portion of the USD high -
yield bond space that exhibits higher beta, which may appeal to investors who want a risk - on approach.
Not exact matches
In the EM local currency
bond space, Colombia (10 - year
yield -37 bp), South Africa -LRB--18 bp), and Ukraine -LRB--17 bp) have outperformed this week, while the Philippines (10 - year
yield +27), Brazil (+20 bp), and Mexico (+4 bp) have underperformed.
This is why as soon as WeWork, the US shared office
space company, said it wanted to issue $ 500 million of high
yield bonds, we saw morale perk up and investors dive into the new issuance.
She is a regular contributor of fixed income analysis to Saxo bank's News & Research hub where she outlined her view of
bond market trends across the developed and emerging market
spaces, as well as in investment grade and high -
yield bonds.
While high -
yield bond recovery rates hover around the 35 percent level, recovery rates in the loan
space are more toward the 75 percent range.
In recent weeks, the spread (or difference) between the
yield of the 10 - year Treasury and a high
yield bond of comparable maturity actually widened a bit, roughly 0.45 %, restoring some value in the
space.
Bonds rated as BB or lower often form the «High -
Yield» investment
space that I wrote about earlier.
We are now able to access the high -
yield municipal
bond space with ease, something we would not normally do with individual
bonds.
Many North American energy companies have borrowed significantly in the public debt markets to finance their operations, and many of the high -
yield bonds in this
space have lost value in recent months.
If for example, banks were having trouble floating
bonds because the spread of corporate
bonds was too high versus government
bonds (
yields were very high because prices are low due to little demand to own these bank issued
bonds) they could buy these types of
bonds to get money flowing in this
space if the central bank so desired.
The default risk of high -
yield bonds is still relatively small when compared with the risk of investing in equities, so for many investors, high -
yield bonds and
bond funds occupy a strategic
space between stocks and less risky
bonds.
Weakness in the high -
yield bond market had an impact on the leveraged loan
space.
The panel has suggested to «lower the mandatory proportion of G - Secs» in the Life Fund and the Pension and General Annuity Funds and allow for higher exposure in alternative higher -
yielding assets (like equity or property) or high rated corporate
bonds» to help insurers generate a high gross return on investments so that insurance savings products can compare favourably in the financial savings
space.