The outlook for high yield in the oilfield
Fundamental research offers a guide to the risk that low oil prices pose to energy companies with high yield debt.
Fundamental research offers a guide to the risk that low oil prices pose to energy companies with high yield debt.
Generous yield spreads and a low default rate on corporate debt give high-yield bonds attractive investment potential in today’s market. Lower-rated bonds may offer higher yields in return for more risk.
A modest pace of economic recovery has helped to keep the corporate default rate below historical averages and provides favorable conditions for high-yield bonds. Lower-rated bonds may offer higher yields in return for more risk.
Spreads on high-yield bonds widened to attractive levels even as the expected corporate default rate has remained subdued.
We believe the sell-off in high-yield bonds actually represents an investment opportunity.