- According to the rule, buyer beware when the coupon on a new paper slips below the issuer's leverage. One recent example is July's $500M eagerly bought-up sale from HD Supply Waterworks, where the paper at 6.125% yielded less than the company's 6.3x leverage.
- "The pendulum has been swinging back toward the issuer when it comes to negotiating ultimate terms,” says one fund manager. “When there’s a new issue with any kind of yield, usually more than 6 percent, it is generally going to do well.”
- Diamond Hill corporate credit fund is topping 99% of its peers this year. And what does its portfolio manager have to say? “If you had a great 2007, that turned out to be something to be ashamed of ... Fear of missing out in a strong market is pretty dangerous. A lot of that is going on now.”
- Source: Sally Bakewell and Sridhar Natarajan at Bloomberg
- ETFs: HYG, JNK, DHY, HIX, PHT, HYLD, EAD, HYT, JQC, CIK, DSU, ACP, SJB, ANGL, NHS, MCI, KIO, ARDC, AIF, CIF, PHF, IVH, FHY, GGM, MPV, JSD
- Now read: HYG Minus Liquidity
Original article