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Euro HY: an essential asset class in a low-rate environment

 

The essential

HY Euro’s performance in recent months has been remarkable. The HY Euro Index tightened by 157bp in 2016 and 48bp since the start of 2017. So why is it still a good idea to take a position on HY Euro?

 

  • The technical factors are supportive.
  • Issuers’ fundamentals remain favourable to bond investors. The default rate in the high-yield segment has fallen back in recent years to a historic low of 2%. We’re at the centre of a virtuous circle: 1) strong demand for credit is helping issuers easily refinance their debt and extend their debt’s average maturity, 2) historically low borrowing rates are also substantially reducing borrowing costs.
  • In a low-rate environment, HY Euro offers attractive carry strategies.

Flag-UK

May 2017

Flag-FR

Mai 2017

 

The Article

L'Article

AINOUZ Valentine , Credit Strategy
COHEN Marina , Head of High Yield Credit, Alpha Fixed Income Euro
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Euro HY: an essential asset class in a low-rate environment
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