Credit quality deterioration is inevitable
Credit metrics will continue to deteriorate in the next year or two, but European high yield bonds in particular are pricing in too severe a downturn, says Mark Holman
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TwentyFour
Healthy premiums drive big day for primary markets
With well over €10bn of new bonds sold by European banks and corporates on Monday, Felipe Villarroel analyses the pricing and looks at the patterns that usually emerge when primary markets reopen.
Are Europe’s winter prospects warming up?
With European energy prices well off their peaks, Felipe Villarroel breaks down the myriad factors impacting the region’s economic prospects in the next few months.
To call or not to call – who decides?
With a surprising statement issued by the Australian regulator, Eoin Walsh looks at the wider implications for the calling of AT1 bonds
UK risk premium looks too steep with stability restored
With Rishi Sunak and Jeremy Hunt leading a more fiscally conservative UK government, Johnathan Owen checks in on sterling asset valuations and argues the UK premium is overcompensating for underlying risks.
ECB echoes subtle change in central bank tone
While central banks remain committed to battling inflation with big rate hikes, George Curtis detects a clear change in tone which has seen market expectations of terminal rates tumble in recent days.
Here’s why private equity is buying bonds over ‘real’ assets
With private equity firms active buyers of CLOs and CMBS in recent weeks, Aza Teeuwen explains why these investors are shunning physical assets in favour of asset-backed bonds.
Non-call doesn’t necessarily mean price pain in AT1s
After Banco Sabadell declined to call its 6.125% AT1s at their first call date due to current market conditions, Dillon Lancaster looks at the structure of the bonds and explains what the move means for investors.
Has the UK risk premium gone too far?
With some UK bank bonds now trading with higher yields than their counterparts in Turkey, Mark Holman questions whether the dumping of UK and sterling assets has gone too far.
Asset-Backed Securities Quarterly Update – October 2022
TwentyFour Partner and Portfolio Manager, Douglas Charleston, explains how ABS markets have performed in Q3 2022 and provides his outlook for the rest of the year.
AT1s: when refinancing a 5% bond at 7.25% makes sense
With call risk in Additional Tier 1 (AT1) bonds back in the headlines, Felipe Villarroel explains how banks think about the economics of calling, and why he believes market participants frequently overestimate this risk.
Are BBBs still the place to be?
With rates volatility persisting and developed markets likely sliding toward recession, Jack Daley revisits our research on BBB defaults and returns and explains why we tend to maintain a significant allocation to BBB credit.