Category Archives: Peritus

High Yield Bond and Rates: Duration and Yield

With another Fed meeting on the horizon this week, the topic of rates has again come into focus.  While in just a matter of months, markets have seemed to quickly move from the expectation that we’d see a few rate increases …

Posted in Peritus

High Yield Market Default Update

As we stand today, default activity year-to-date has already surpassed the par default level for all of 2015.  However, the defaults remain almost entirely in the commodity sectors—Energy and Metals/Mining—while outside of these segments, default rates remain at or near …

Posted in Peritus

Unprecedented Times

We are in the midst of unprecedented times.  Over the past week, we have seen the S&P 500 hit record highs and the US 10-year Treasury bond yields hit record lows.  We see headlines like “NIKKEI soaring on stimulus expectations,” …

Posted in Peritus

Where to Go?

We are in the midst of a global low yield environment.  Yields on the 10-year bonds (yes, 10 years) for Switzerland, Japan, and now Germany are negative, and yields are under 0.50% for much of Europe.1 With the Fed meeting …

Posted in Peritus

Strategies for Investing in a Rising Rate Environment

Accurately calling interest rate moves has proved to be a difficult, and futile, task for investors over the past few years as we have seen wild moves and really no sustained direction.  The only aspect of rates that can be …

Posted in Peritus

Managing Liquidity in a Changed Market

It is no secret that liquidity in the secondary high yield corporate bond market has changed since the financial crisis, especially with the implementation of certain banking regulations that limit market making activities by the large banks.  In response to …

Posted in Peritus

Positioning for Value

Last week we discussed that despite the recent rebound in the high yield market, we still see value to be had in this space (see “Too Far Too Fast?”).  Not only do we currently view actively managed high yield bonds …

Posted in Peritus

Too Far Too Fast?

We have seen a pretty sizable bounce back in the high yield market off of its February 11th lows, with spreads declining and prices rising.1 This leads to the question, have we come too far too fast?  We believe that …

Posted in Peritus

High Yield Market Technicals: The New Issue Market

We continued to see the broader high yield market rebound in April after hitting multi-year lows in mid-February, despite bankruptcies accelerating as we had expected. Looking at market technicals, as we have seen buyers and interest come back into the …

Posted in Peritus

High Yield Investing: Risk and Outcomes

We have been active in the credit markets for decades and we see the primary risk for credit investors is default.  While interest rates play a role in all asset classes, they historically have a very limited effect on a …

Posted in Peritus