This Week in High Yield

The high-yield market improved on very thin volume over the past week heading into the Christmas holiday as oil continued to hold above $52 and market sentiment remained constructive. The yield to worst and spread on the Bank of America High-Yield Index (BAML) tightened 11bps/22bps over the week to close at 6.18%/+416bps, respectively. Oil finished the week slightly higher closing at $53.02.

Index 16-Dec Yield/Level Weekly Return/Change MTD Return/Change YTD Return/Change
BAML HY 6.18% 0.42% 1.66% 17.14%
BAML Spread 416bps -22 -51 -279
Dow 19,933.81 0.46% 4.34% 17.51%
S&P 500 2,263.79 0.29% 3.08% 13.17%
10yr treasury 2.54% -6 16 27


Lipper reported a small weekly outflow from mutual and exchange traded funds of $19 million for the week ended Dec 21st, coming on the heels of the year’s 4th largest inflow the prior week of $3.75 billion. Just one deal priced over the week for $350 million for Baffinland Iron Mines, a deal that they have been working to bring to market for several weeks now. For December, 37 deals for $19.19 billion will be the final tally, good enough for the busiest December volume since 2013 and the busiest month this quarter. The final volume for 2016 will come in at 363 deals for $229.976 billion in proceeds.

The Bank of America Merrill Lynch High Yield Index monitors the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market.  Index data sourced from Bloomberg. BAML HY represents the index yield for the designated date, while return/change represent the index return for the period ending date. Yield referenced is the yield-to-worst and spread referenced is the spread-to-worst.  Fund flow data as reported by Lipper for the week running Thursday to the following Wednesday.
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