Author Archives: Heather Rupp

The Year of Active Management

The Bank of America Merrill Lynch US High Yield Index currently carries a weighted average yield to worst of 5.9%, a yield to maturity of 6.3%, a spread to worst of 423 bps, an average coupon of 6.5%, and average …

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The High Yield Bond Market: 2016 Review, 2017 Outlook

We entered 2016 coming off a tough year for the high yield market.  The free fall in energy and other commodity prices over the course of 2015 not only caused a collapse in bonds in the energy and commodity sectors, …

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High Yield Default Rate: 2016 Review and 2017 Outlook

In early 2016, oil was heading into the $20s and market prognosticators were expecting that we’d see a huge spike in energy and commodity related defaults in 2016 and that would continue into 2017.  The projection was for a 6% …

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The Floating Rate Loan Market: More to Consider

For those concerned about interest rates rising, turning to the floating rate loan market may seem like it could be a great alternative.  Over the past few weeks, as we have seen the expectation for higher rates firmly take hold …

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The Election Impact on High Yield: Rates and Regulation, Regulatory Changes

Post November’s election, we see regulation as an area of potential impact on the high yield market—or more precisely the potential repeal of regulation.   The potential repeal of Obama Care is the headline that is getting the most attention.  We …

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The Election Impact on High Yield: Rates and Regulation, High Yield in a Rising Rate Environment

While the market seems to be jumping to the conclusion that infrastructure and other government spending and the benefit of lower taxes will drive growth and inflation, taking interest rates higher, we aren’t a believer that we will see dramatic …

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The Election Impact on High Yield: Rates and Regulation, Interest Rate Outlook

If this post-election economic growth scenario that we discussed in our post last week (see “The Election Impact on High Yield: Rates and Regulation, Interest Rates and the Economic Outlook”) were to become a reality, potential inflationary pressures could mean …

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The Election Impact on High Yield: Rates and Regulation, Interest Rates and the Economic Outlook

Now that Donald Trump has surprised virtually everyone with his Presidential victory, what does that mean for the high yield market?  For us, it looks like the most relevant impacts are interest rates, taxes, and regulations. First, let’s look at …

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The Technical Piece of Active Management

Over the years we have spent a great deal of time discussing fundamental analysis and how important we believe it is in high yield investing.  Fundamental analysis—digging into a company, understanding what they do, and evaluating the future outlook for …

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Bond versus Equity: Capital Structure Positioning Matters

In our writings, we have often posed high yield bonds as an equity alternative.  Over the last couple decades, these two asset classes have had similar return profiles.1 However, as we have often noted, high yield bonds have historically had …

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