The high-yield market continued its rally Tuesday pushing the yield to worst and spread on the Bank of America High-Yield Index another 20bps and 29bps tighter to 8.92% and +746bps, respectively, on the day as inflows and better oil continue to spur positive momentum. With the rally over the past 12 trading days the high-yield market has nearly erased the year to date losses, sitting at a total return of -0.30% through Tuesday after being down 5.14% through Feb 11. HCA priced Tuesday’s only new issue bringing a $1.5 billion drive-by deal at 5.25% for general corporate purposes. High-yield exchange traded and mutual fund flows Tuesday remained positive with a single day inflow of $1.244 billion, skewed towards actively managed strategies. This morning we’re opening flat as equity futures and oil head lower, erasing yesterday’s gains, after data showed U.S stockpiles touched a record high. With inflated cash levels and positive vibes in the market, the path of least resistance seems to be higher for the high-yield asset class.

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. Yield referenced is the yield-to-worst and spread referenced is the spread-to-worst.  Daily fund flows sourced from J.P. Morgan.