High yield volume continues to be light as many market participants attend the final day of the annual J.P. Morgan high yield conference in Florida, while other factors such as the lack of a calendar, Bernanke testimony, and sequestration are also affecting secondary flows. ETF inflows have picked up the last couple days as market sentiment has improved, which combined with March coupon payments hitting Friday creating cash that needs to be put to work, point to a continued strong technical backdrop for the high yield market. No deals priced yesterday for the first time in a long time. This morning, two drive-by deals have been announced, which along with one deal marketed yesterday should price this afternoon. Momentum from yesterday is spilling in to early trading this morning with equities higher, HY 19 Credit Index up 1/8 of a point, and high yield cash bonds well bid out of the gate.
Although information and analysis contained herein has been obtained from sources Peritus I Asset Management, LLC believes to be reliable, its accuracy and completeness cannot be guaranteed. This report is for informational purposes only. Any recommendation made in this report may not be suitable for all investors. As with all investments, investing in high yield corporate bonds and loans and other fixed income, equity, and fund securities involves various risks and uncertainties, as well as the potential for loss. High yield bonds are lower rated bonds and involve a greater degree of risk versus investment grade bonds in return for the higher yield potential. As such, securities rated below investment grade generally entail greater credit, market, issuer, and liquidity risk than investment grade securities. Interest rate risk may also occur when interest rates rise. Past performance is not an indication or guarantee of future results. The index returns and other statistics are provided for purposes of comparison and information, however an investment cannot be made in an index.