Category Archives: Peritus

Understanding Risk in High Yield Bonds: A Look at Volatility

The high yield market, also known as the “junk bond market” seems to be considered by many to be a risky and volatile, niche market.  The reality is that there are nearly $2 trillion US dollar, non-investment grade bonds globally.1 …

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High Yield Morning Update

The high yield secondary bond market is opening up higher today, as the new-issue calendar continues to be light, forcing buyers into the secondary market.  Only eight deals for $3.685B in proceeds priced last week, the slowest week this month.  …

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The Middle Ground

We are hearing concerns from some about valuations within the high yield market.  Spread levels are one way we assess value within this market and current spread levels are below historical medians and averages.1 We believe this makes sense given …

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High Yield Morning Update

Investment grade and high yield credit rallied modestly following the French election and the release of solid economic data. The VIX is at or near all-time lows, even when many are saying high yield is overvalued.  Many also say that …

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The Pillars of the Peritus Strategy

Currently 23% of the domestic high yield bond market trades at a yield-to-worst under 4%.1  So on nearly a quarter of the market, investors are currently making what they might traditionally expect from investment grade debt.  This is exactly why …

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Floating Rate Loans: Inflows, Issuance, and Income

The floating rate bank loan market has been a popular area for investment post the election.  We have seen inflows into the space in 37 of the last 38 weeks, with $30bn coming into the retail loan funds (mutual funds …

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Return, Risk, and Diversification

When assessing a portfolio and determining their asset class mix, investors often allocate large portion to equities as this is believed to have a much better longer-term investment return profile than fixed income securities (bonds, loans), while fixed income is …

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Is Retail the Next Energy?

With weak same store sales and countless store closures announced over the first quarter, retail has been in the spotlight as an area of mounting weakness.  So far this year we have seen bankruptcies from Payless Shoes, H.H.Gregg, Eastern Outfitters, …

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A Look at Valuations: Corporate Bonds and Equities

We often look at valuations in the high yield market by analyzing the spread over a risk free rate, which is generally a comparable maturity Treasury bond.  Here’s a look at where we have been historically versus where we are …

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Spreads, Oil, and Finding Value in the High Yield Bond Market

We have seen a huge rally in high yield over the last year.  As the high yield market was positioned a year ago, oil was just bouncing of its lows in the $20s, contagion from the energy sector (given energy …

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