Category Archives: Peritus

Understanding Market “Liquidity”

Liquidity is generally defined as the ability to purchase or sell an asset without causing a dramatic change in price. However, this definition can be misleading as throughout the history of markets, we have seen securities trade with big price …

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The Ratings Game = Opportunity

As we look at today’s high yield market, we are seeing a bifurcated market, and opportunity, in terms of the various ratings categories. During 2015, CCC credits were down 12%, or down 8.3% excluding commodities, while BBs were down just …

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The High Yield Market Repricing: An Opportunity

Markets across asset classes and across the world have been in a seemingly free fall since 2016 began, with equities domestically and internationally, oil/commodities, and high yield bonds, among others, all facing big declines, all while US Treasury bond and …

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The Equity Alternative

Three weeks ago, we posted a market commentary arguing that the run for equities was over, as we saw little in the way of catalysts ahead (High Yield vs. Equities—Is This the End of the Run for Equities?). In the …

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The Pricing Issue in High Yield

I talk with many professionals in the asset management business each week.  There have been a few recurring questions: where is the bottom in high yield and what is causing this downturn? Let me explain. As per what has caused …

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Implied Default Rates for the High Yield Market

As we assess potential value in the high yield bond market, we believe it is important to consider both spreads and expected default rates. Current spreads offered by the high yield bond market are well above average and are now …

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The Opportunity Cost of Not Investing

There have been a number of reasons investors have fled the high yield bond market over the past year, including concerns over interest rates, energy and commodity exposure, liquidity, and defaults. With this sell off, spreads have now increased to …

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High Yield vs. Equities—Is This the End of the Run for Equities?

The decline in credit has been well publicized over the last several weeks, though this decline began months ago. Since the summer, we have seen spreads, a measure of valuation for the high yield market, widen from 400bps to 760bps1 …

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High Yield Bonds: The Energy Dilemma

Oil has once again broken the $40 level, and then swiftly broke $35.  This recent leg down in oil has taken a toll on the high yield market given that the energy sector accounts for 13-16% of the high yield …

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Interest Rates: Moderate is the Word

In our recent piece “The High Yield Bond Market: Facing a Rising Rate Environment, Time to be Concerned?” we discussed why we don’t feel the high yield market is at major risk if rates rise. And as we look toward …

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