High-yield continued to come under pressure yesterday to start the new week amid weak stocks, plunging oil and more redemptions from retail mutual and exchange traded funds. The yield-to-worst/spread on the Bank of America High-Yield Index each widened 5bps Monday to close at 6.06%/+412bps now wider by 49bps/57bps since hitting year to date lows in early March. The primary market was quiet and tentative Monday after pricing seven deals for $4.185 billion last week. Oil prices remained weak, dropping 0.5% on the day, down 2% over the last six sessions and down 13% from on 18-month high of $54.45 over the past four weeks. US Treasuries continued to move higher as haven assets gained ground, with the yield on the 10yr and 5yr note are down 9bps and 10bps, respectively, in the past six sessions. Outflows continue to hamper the high yield bond asset class, with Lipper estimating a $500 million move to the sideline WTD (reporting week runs Thursday to Wednesday). This morning US markets are little changed as investors weigh whether this selloff stemming from uncertainty around US policy has further to go. Oil is trading up nearly 1% in early trading, easing some of the recent pressure on the high-yield energy sector while the rest of the market trades relatively flat. No new issues are slated to price today.
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.