Corporate bonds

Talking heads – Testing times for corporate bonds

02/28/2022 1 min read Increased market volatility and uncertainty about the pace at which the ECB will proceed with its bond purchases are the main tests that investors in European corporate bonds are currently facing. Mitigating factors such as strong earnings, strong cash positions and low defaults could be negated by concerns that the central […]

Corporate bonds

With rates moving, shorten the duration of corporate bonds

In a rising rate environment, bond investors are caught between a rock and a hard place, but one solution is to add shorter-duration corporate bonds. The Federal Reserve is already considering raising rates this year, which could erode bond incomes over time, especially if inflation continues to soar. Corporate bonds could be the sweet spot, […]

Corporate bonds

Tech-light corporate bonds escape worst of stock market woes

Even though US investment grade credit risk premia have reached their highest level in a year, they are at levels similar to those of early February 2020. Credit may have been boosted less by central bank stimulus; US IG debt holders have returned 9% through 2020-21, while US equities have returned 47%. Many companies also […]

Corporate bonds

Analysis-Tech-Light Corporate bonds deviate from worst stock market woes | Investment News

By Yoruk Bahceli and Saikat Chatterjee LONDON (Reuters) – The U.S. Federal Reserve is on a warpath and global equities had their worst start to the year since 2016, but corporate credit, with limited exposure to the hardest-hit tech companies, is showing signs of remarkably resistant. While US and European corporate bonds – those rated […]

Corporate bonds

Analysis: Tech-light corporate bonds escape worst of stock market woes

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., January 21, 2022. REUTERS/Brendan McDermid Join now for FREE unlimited access to Reuters.com Register LONDON, Feb 1 (Reuters) – The U.S. Federal Reserve is on a warpath and global equities had their worst start to the year since […]

Corporate bonds

Investment grade corporate bonds head for 5th worst monthly return on record

Debt sold by the biggest companies stumbled at the start of 2022, with most of the nearly $11 trillion U.S. corporate bond market poised for its fifth-worst monthly return on record. Investment grade corporate bonds, debt issued by many leading S&P 500 SPXs, +1.89% companies, were heading for a 3.1% loss on a total return […]

Corporate bonds

What are corporate bonds and how do they work?

Corporate bonds are excellent investments for those seeking higher yields and can withstand increased risk Kameleon007 for iStockphoto; Cloth Contents What is a corporate bond? In a nutshell, a corporate bond is like a loan from an investor to a company, which the company repays with interest on the bond’s maturity date. Companies see bonds […]

Corporate bonds

Wall Street banks have their eyes on corporate bonds

Oith the end of bond purchases by the Federal Reserve, the big Wall Street banks are salivating at the idea of ​​buying corporate bonds. With inflation soaring, the Fed is also looking to raise interest rates this year as the economy continues to recover from the pandemic. Before that happens, banks are looking to add […]

Bank

2 Fat yield increases by up to 10%, to capitalize on rate increases

svetikd/E+ via Getty Images Co-produced with “Hidden Opportunities” introduction Since the start of the pandemic, our economy has been given a major boost by the US government. Months of massive quantitative easing and stimulus checks have left Americans swimming in big money, driving a monster rally from the lows of March 2020. The investing community […]

Corporate bonds

Corporate bonds could reward income investors in 2022

Generally speaking, 2021 has been an unforgettable year in the bond market and more frustration could occur in 2022 as the Federal Reserve intensifies its tapering activities and embarks on interest rate hikes. Corporate bonds could be a way for investors to stay committed to fixed income in the new year without worrying about Fed […]

Corporate bonds

Demand for U.S. corporate bonds could rise thanks to foreign purchases, JPMorgan expert says

Foreign investors looking for higher Treasury yields could support demand for US corporate bonds, according to an expert from JPMorgan. Foreign holdings of US corporate bonds surged midweek “after the 10-year Treasury yield rose about 18 basis points,” Bloomberg reported with remarks from Eric Beinstein, who heads the high quality US credit research and strategy […]

Corporate bonds

What to watch with corporate bonds in 2022

Good quality corporate bonds are not doing much to boost investor confidence this year. For example, the widely followed Markit iBoxx USD Liquid Investment Grade Index is down 5.18% year-to-date, adding another layer of frustration to the 2021 fixed income market. However, 2022 could bring better things with higher quality companies, especially if downgrades and […]

Corporate bonds

Goldman says investors should look to debt securitized from corporate bonds

(Bloomberg) — Rising inflation in the United States could end up being much better for consumers than for businesses, so investors should shift away from corporate bonds and into asset-backed securities. assets and other securitized debt, according to Goldman Sachs Group Inc. strategists. Supply chain disruptions will likely limit corporate profits next year, which could […]

Corporate bonds

Investors would benefit from “stable credit profiles and low interest rates”, analyst says

Monica Erickson, DoubleLine Capital Investment Grade Corporate Bond Portfolio Manager, assesses the state of the corporate bond market and its areas of weakness and profitability for investors. Video transcript BRIAN SOZZI: Okay, let’s get back to inflation and interest rates here. The bond market has come to know only a land of low interest rates. […]

Corporate bonds

Investors would benefit from ‘stable credit profiles, low interest rates’, analyst says

Monica Erickson, investment grade corporate bond portfolio manager at DoubleLine Capital, assesses the state of the corporate bond market and its areas of weakness and profitability for investors. Video transcript BRIAN SOZZI: Well, back to inflation here and interest rates. The bond market has come to know only a low interest rate country. This rings […]

Corporate bonds

A flatter yield curve is bad news for corporate bonds, says BofA

(Bloomberg) — Inflation fears that have rattled short- and medium-term U.S. Treasuries this month could spell trouble for credit markets, Bank of America Corp strategists say. Concerns about rising inflation narrowed the spread between short-term and long-term Treasury yields. This kind of yield curve flattening has historically hurt investment-grade corporate bond yields, strategists wrote in […]

Corporate bonds

For an active corporate bond market

The creation of an active corporate bond (CB) market is becoming increasingly urgent. Asset Reconstruction Companies (ARCs) need large-scale financing and are asking banks to lend to them. Instead, they should raise funds by issuing bonds. The government’s chief economic adviser, Sanjeev Sanyal, has rightly called on non-bank financial companies (NBFCs) to step up credit […]

Corporate bonds

Electronic trading of US corporate bonds is finally taking off. But it’s still early, says this investor

It’s been about two decades, but e-commerce in corporate bonds has finally made notable inroads into a market long known for its privacy and low-tech methods. According to a new report from the Greenwich Coalition, the growth of the $10.7 trillion electronic corporate bond market in the United States has increased by more than 100% […]

Corporate bonds

Why Kenya needs a recovery in the corporate bond market now

Ideas & Debate Why Kenya needs a recovery in the corporate bond market now Wednesday, June 30, 2021 Investment brokers at the Nairobi Securities Exchange (NSE) in Nairobi. PICTURES | TO FILE Since the successful issuance of the 25 billion shilling KenGen #ticker:KEGN public infrastructure bond in 2009, the local corporate bond market has yet […]

Corporate bonds

Fed must say ‘it won’t buy corporate bonds anymore’ to break ‘feedback loop’, says bond CIO

Say it, if you mean it. Brad Tank, director of fixed income investments at Neuberger Berman, believes the Federal Reserve will have a hard time telling investors the party is over, even if it never plans to support the corporate bond market again. US $ 10.7 trillion. “There now appear to be two types of […]

Corporate bonds

Fed sale of corporate bonds could lead to ‘hiccups’ in debt issuance: Moody’s

Diving Brief: JThe Federal Reserve could cause “temporary disruption” in debt markets as it begins this month to wind down an emergency bond-buying program it created in March 2020 to ease pandemic-induced turmoil in the corporate debt market, Moody’s Analytics said in a report. “It’s easier for the Fed to get into a market than […]

Corporate bonds

Another concern: Corporate bond yield spreads are widening

Photo by JamesBrey/iStock via Getty Images The riskiest assets in the bond market are showing widening spreads, with investors seemingly shying away from investing in the riskiest stocks as inflation fears mount. According to Joe Rennison in the FinancialTimes, “riskier assets have now started to show signs of caution.” The extra yield above Treasuries that […]

Corporate bonds

US corporate bonds post second-worst quarterly loss in history. Why not everything is bad

It’s been a weird and wild three months in financial markets, culminating in the worst quarterly loss for most of the $10.6 trillion U.S. corporate bond market since the 2008 global financial crisis. The investment grade tracking ICE BofA US Corporate Index on Wednesday recorded a negative total return of -4.495% for the first quarter […]

Corporate bonds

Sebi to create fund to buy bonds of stressed companies (FM Sitharaman)

The Securities and Exchange Board of India will establish a Corporate Debt Market Development Fund (CDMDF) to provide liquidity to mutual funds and other institutional investors participating in the corporate bond market, has said Finance Minister Nirmala Sitharaman. As the financial sector evolves from a bank-dominated system to a market-oriented one, supporting financial markets has […]

Corporate bonds

The budget provides for the creation of a permanent framework for the purchase of corporate bonds

In a bid to inject more liquidity into the nascent corporate bond market, Union Finance Minister Nirmala Sitharaman has announced the creation of a permanent institutional framework, but more specific details will tell whether this could be a success, according to bond market participants. “To build confidence among corporate bond market participants […]

Corporate bonds

Demand for corporate bonds pushes inflation-adjusted yields to zero

The average yield on investment-grade U.S. corporate bonds is now below a key measure of investors’ inflation expectations, a first that shows how much demand for fixed-income assets is reducing their potential returns. On Friday, the expected annual inflation rate over the next decade – derived from the difference in yield between nominal and inflation-adjusted […]

Corporate bonds

Corporate bonds stand out in the second quarter

Editor’s note: Read the latest news on how the coronavirus is rocking the markets and what investors can do to navigate it. The combination of tightening credit spreads and falling interest rates led to an admirable performance across the fixed income sector in the second quarter. The Morningstar US Core Bond Index (our broadest measure […]

Corporate bonds

The Fed says it will start buying individual corporate bonds

The Federal Reserve is expanding its foray into corporate credit to now buy bonds from individual companies, in addition to the exchange-traded funds it already buys, the central bank announced on Monday. As part of an ongoing effort to support market functioning and ease credit conditions, the Fed has added features to its secondary market […]

Corporate bonds

The Fed will increase its purchases of corporate bonds on the secondary market

The Federal Reserve said on Monday it would expand its efforts to support the corporate debt market by buying a “broad and diverse market index” of U.S. corporate bonds in the secondary market. The central bank says purchases of individual corporate bonds will be used to create a ‘corporate bond portfolio’ that meets the Fed’s […]

Corporate bonds

The Historic Corporate Bond Rally (NYSEARCA:LQD)

Most investors are aware of the historic nature of the stock market rally. Since the March 23 lows, the S&P 500 (SPY) has rebounded nearly 40%. Such large gains over such a short period of time have not been seen since the Great Depression. A stunning recovery is also underway in investment grade corporate bonds, […]

Corporate bonds

The Fed makes history by buying $750 billion in corporate bonds

The Federal Reserve is buying corporate bonds for the first time in an effort to curb the economic fallout from the coronavirus. The central bank will start buying $750 billion in corporate bonds on Tuesday with its secondary market corporate credit facility. The program will prioritize ETFs with higher quality debt and some high yield […]

Corporate bonds

The Short and the Long of the Fed’s Corporate Bond Buying

By increasing liquidity and improving the functionality of corporate bond markets, the US Federal Reserve’s (Fed) new programs have been good news in the near term. Still, a number of unknowns remain regarding the rollout of these programs, and we anticipate potentially difficult impacts for the most indebted companies over the longer term. The Fed’s […]

Corporate bonds

Bank of America says stock prices and corporate bonds are at rock bottom

While the direction of the market still depends on the slowing of the coronavirus epidemic, some signs are emerging that the bulk of the sale of stocks and corporate bonds is behind us, according to the chief investment strategist of Bank of America, Michael Hartnett. The first is the magnitude of the decline. More than […]

Corporate bonds

VCLT: Long-term corporate bonds offer the worst of both worlds (NASDAQ: VCLT)

A preponderance of data suggests the economy is headed for one of two outcomes; Either economic growth will slow down and turn into a recession, or it will come back and fan the small but growing fire of inflation. With extremely low corporate bond spreads, the first outcome would likely cause spreads to widen significantly […]

Corporate bonds

Deere sells 30-year corporate bonds at record yields

Deere DE 0.74% & Co. on Tuesday sold 30-year bonds at a record yield for U.S. corporate debt of that maturity, taking advantage of falling U.S. Treasury yields to lock in favorable interest rates. On a busy day for corporate bond issuance, Deere sold 30-year bonds at an initial yield of 2.877%. This broke the […]

Corporate bonds

Investing: the growing risk of corporate bonds

Hungry and desperate bond bears, hungry for what they see as a long-awaited feast and exasperated by another rally in long-term Treasuries, have recently sniffed out an unknown target: US corporate bonds. Bond yield charts confirm a dismal year for high quality corporate debt. The market slice rated BBB by Standard & Poor’s tracked junk, […]

Corporate bonds

Why corporate bonds are risky with higher interest rates | Obligations

Bond buyers are urged to stay at the shallow end of the yield curve to avoid unnecessary duration risk in a low interest rate environment. The credit quality of these investments is less discussed. When interest rates are close to zero, companies and other entities go into debt. The difference in yield between higher quality […]

Corporate bonds

The growing risk of corporate bonds

Hungry and desperate bond bears, hungry for what they see as a long-awaited feast and exasperated by another rally in long-term Treasuries, have recently sniffed out an unknown target: US corporate bonds. Bond yield charts confirm a dismal year for high quality corporate debt. The slice of the market rated BBB by Standard & Poor’s, […]

Corporate bonds

How it got riskier to own high-quality corporate bonds

“It’s actually quite smart that they issued a lot of long-term debt at very low interest rates,” Pierson said. “I’m not saying they’re completely immune to rising interest rates, but it’s been good financial management.” The other notable change in investment grade corporate bonds is a deterioration in overall quality. In 2007, 27% of the […]

Corporate bonds

Why You Should Be Optimistic About Corporate Bonds | Obligations

The $1.5 trillion Tax Cuts and Jobs Act of 2017 is expected to bolster corporate earnings, making corporate bonds attractive additions to a balanced portfolio, but there just so happens to be some d other reasons to be optimistic – and cautious – about these investments. Lower corporate tax rates immediately increase cash flow, which […]