Bankers are declaring the growing corporate high-yield bond market as one of the most exciting new credit areas. This is because investors’ new willingness to take credit risk translates directly into an opportunity to do what investment banks love best: leading new issues.
The arguments for investors to buy corporate high-yield bonds are that they provide diversification from investmentgrade bonds and equity. Returns on non-investment-grade bonds are not strongly correlated to either asset class, moving slightly more in step with equities than anything else.
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