/perspectives/sector-views/high-yield-and-bank-loan-outlook-october-2015

High-Yield and Bank Loan Outlook - October 2015

While volatility in credit markets may not yet be over, we believe now is the time to look for high-yield and bank loan investment opportunities.

October 14, 2015    |    By Guggenheim Partners

Report Highlights

  • The Credit Suisse High-Yield Bond and Leveraged Loan Indices posted losses of 5.2 percent and 1.2 percent for Q3 2015, respectively, the worst performance since Q4 2008 for high-yield bonds and since Q3 2011 for bank loans.
  • There may be some additional volatility ahead, but we are already seeing value that has resulted from spread widening over the past few months. The relative value of B-rated corporate bonds over higher quality credits looks especially attractive given our positive macroeconomic outlook.
  • Leverage ratios, which have returned to historical highs, are indicative of a rapidly advancing credit cycle, but debt burdens are manageable given low borrowing costs. We believe leveraged credit markets have room to run in the current cycle.
 
 
Important Notices and Disclosures

This article is distributed for informational purposes only and should not be considered as investing advice or a recommendation of any particular security, strategy or investment product. This article contains opinions of the author but not necessarily those of Guggenheim Partners or its subsidiaries. The author's opinions are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Guggenheim Partners, LLC. ©2015, Guggenheim Partners. Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information.

 


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