Fundamental research offers a guide to the risk that low oil prices pose to energy companies with high yield debt.
Fundamental changes in old industries, from gas to chemicals to telecommunications, are shaping the landscape of high-yield investment opportunities. As interest rates rise, bond prices fall. 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.