High-yield bond prices rebounded sharply over the past two days, erasing more than a weeks’ worth of loses, after the Fed’s statement calmed the jittery market, reiterating a gradual hike approach and lack of intention to raise over the next few meetings. The yield-to-worst/spread on the Bank of America High-Yield Index tightened 13bps/14bps yesterday to close at 5.94%/+388bps, down 24bps/17bps in the past two sessions. Issuance resumed in a big way yesterday as six issuers and seven tranches priced for $4 billion in proceeds. Oil rallied at the open but faded into the close to finish down 0.24% at $47.72. Lipper reported the second biggest outflow ever of $5.68b from mutual and exchange traded funds for the week ending 3/15 (reporting week Thursday to Wednesday), making the total outflow over the past two weeks $8 billion. Overnight EM headed for its best week in eight months, even as the global equities rally looked to take a breather. Oil prices are poised for their first weekly gain in March, while the USD is on its way towards its biggest weekly loss since February. High-yield is generally opening the day flat and quiet after what has been a volatile week as investors look forward to the weekend.
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.