CAM High Yield Weekly Insights

(Bloomberg)  High Yield Market Highlights

• US junk bond supply so far this month is 13% above that for all of January 2023, helped by $3.5b of sales Thursday that was the busiest session in three months.
• The market is on track to have its heaviest overall month in more than two years, with new borrowers led by sponsor-owned companies rushing to refinance debt and extend maturities. Yields have held firmly below 8% and spreads remain below 350 basis points.
• At least four borrowers are expected to sell about $4b in the coming days
• Economic data continue to bolster sentiment, the latest being GDP growth trouncing forecasts amid a jump in personal spending
• Resilient growth, strong business investment and new home sales have spurned recession calls and bolstered risk assets
• Junk bonds are headed for weekly gains, with yields down 9bps to 7.80% and spreads narrowing 4bps to 334bps
• Strength has been across ratings
• BB yields have dropped back below 6.5% and spreads hover near 200bps, with the segment returning 0.4% so far this week
• CCCs have climbed for six consecutive sessions, generating combined gains of 0.5% since Monday

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.