High-Yield and Bank Loan Outlook
Second Quarter 2021
Here are the key takeaways from our latest High-Yield and Bank Loan Outlook report:
- The credit cycle framework suggests that we will progress to other phases before experiencing another wave of default activity, which eases our concerns about historically tight credit spreads.
- Fundamental conditions support staying long credit despite historically tight credit spreads, just as they did in the early 1990s when spreads stayed near similar levels for years.
- Based on the pace of rating upgrades in the first quarter of 2021, almost 28 percent of the current high-yield index could receive an upgrade of at least one notch by the end of the year.
- As default probability falls with credit rating upgrades, we think it makes sense to look further down the credit spectrum.
Click here to read the full report
Important Notices and Disclosures
This material is distributed or presented for informational or educational purposes only and should not be considered a recommendation of any particular security, strategy or investment product, or as investing advice of any kind. This material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment decisions, and does not constitute a solicitation of an offer to buy or sell securities. The content contained herein is not intended to be and should not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation.