AXA Investment Managers

COVID-19 Has Shaken Up High Yield and Put Opportunities On the Table

Date:

Matt Howard Binoculars Unsplash
Pixabay CC0 Public DomainMatt Horward. Matt Horward

Author: Meritxell Sedo

  1. The asset class is always prepared for a crisis, but the uneven impact of the virus means fundamental credit analysis is more important than ever
  2. Relatively few high yield issuers should need to refinance debt in 2020 and 2021 thanks to the sector’s flexibility. On the other hand, hedging costs for euro investors have fallen
  3. The hard stop in parts of the economy will lead to defaults, likely in two waves
  4. The arrival of former investment grade issuers into the high yield universe will have a material effect on the market