The high yield market traded with a much better tone this week, bouncing back from last week’s negative return, on a good start to the Q2 earnings season and despite widening sovereign yields in Europe. For the week, the spread on the Bank of America High Yield index (BAML) tightened 12bps to 614bps over Treasuries, while the yield was 14bps tighter to 7.23%. For performance the BAML index returned 0.38% on the week, bringing the year-to-date total to 5.34%.
High yield bond mutual funds and ETFs reported inflows of $637mm this week after last week’s big outflow of $1.29 billion, which had brought an end to the 18 week inflow streak. Still we’ve had 19 inflows in the last 20 weeks with over $25 billion moving into the asset class over that period. For the week, nine new high yield deals priced for $3.1 billion in total issuance bringing the year-to-date total to $122 billion, outpacing last year’s total of $107 billion over the same time period.