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Industrial 6.79% 6.07% 3.34% 102 $105.70 4.04% 12.14 8.12 1.25
Utility 7.84% 9.98% 3.36% 94 $109.14 4.27% 15.21 10.04 1.74
Financial 5.65% 5.30% 3.06% 87 $104.47 3.72% 7.95 5.99 0.68
Source: Bloomberg Barclays Indices
Preferred securities have a year-to-date total return of 10.82% and a trailing-12 month total return of 11.49%, according to
data from Bank of America Merrill Lynch Indices. Leveraged loans have a total return this year of 4.04% and a trailing-12
month total return of 4.74%, according to the same indices.
High yield spreads ended the week at 347 bps over comparable Treasury yields while the yield level was 5.70%. High yield
spreads began the year at 398 bps over which has resulted in tightening of 51 bps year-to-date while yields have fallen
from 6.01% at the onset of 2017 resulting in yields down 31bps. High yield corporate bonds have a total return of 7.24%
year-to-date and 8.01% over the trailing 12-months, according to data from the Bloomberg Barclays Indices.
High Yield Corporate Bond Total Return and Statistical Data 12/8/17
TR-12 YTD Yield Spread Price Coupon Mat Dur Con
High Yield 8.01% 7.24% 5.70% 347 $100.94 6.40% 6.28 3.86 (0.34)
Ba 7.15% 7.66% 4.30% 209 $104.53 5.60% 6.85 4.38 (0.21)
B 6.26% 7.03% 5.68% 348 $101.09 6.59% 6.15 3.60 (0.53)
Caa 9.81% 11.25% 8.33% 612 $95.07 7.84% 5.15 3.11 (0.24)
Ca-D 11.93% 14.49% 24.85% 2,092 $64.73 8.54% 3.38 2.71 0.11
Ba/B 6.72% 7.35% 4.96% 276 $102.85 6.09% 6.51 4.01 (0.37)
Industrials 7.67% 6.84% 5.82% 358 $100.50 6.43% 6.31 3.85 (0.36)
Energy 8.09% 7.32% 6.37% 408 $98.72 6.45% 6.67 4.27 (0.16)
Retailers 1.86% 1.72% 8.32% 584 $92.08 6.51% 6.48 3.66 (0.23)
Utilities 12.79% 12.01% 5.10% 295 $102.32 6.41% 6.59 3.51 (0.52)
Financial 9.88% 8.78% 4.75% 260 $104.80 6.12% 5.86 4.07 (0.12)
Source: Bloomberg Barclays Indices
Sources:
Bloomberg: Bond News
Bloomberg Barclays Indices
CreditSights: Monday Morning Meeting Notes. Focus on the Fed Meeting. December 11, 2017.
CreditSights: U.S. and Euro HY Default Rates: November 2017. December 6, 2017.
Moodys: SGL Monitor. December 1, 2017.
Moodys: December Default Report. December 8, 2017.
Some of the potential risks associated with fixed income investments include call risk, reinvestment risk, default risk and
inflation risk. Additionally, it is important that an investor is familiar with the inverse relationship between a bonds price and
its yield. Bond prices will fall as interest rates rise and vice versa.
When considering a potential investment, investors should compare the credit qualities of available bond issues before
they invest. The two most recognized rating agencies that assign credit ratings to bond issuers are Moody's Investors
Service (Moodys) and Standard & Poor's Corporation (S&P). Moodys lowest investment-grade rating for a bond is
Baa3 and S&Ps lowest investment-grade rating for a bond is BBB-. Ratings are measured on a scale that ranges from
AAA or Aaa (highest) to D or C (lowest).
This is not a complete analysis of every material fact regarding any sector, municipality or security. The opinions expressed
here reflect our judgment at this date and are subject to change. The information has been obtained from sources we
consider to be reliable, but we cannot guarantee the accuracy. It is strongly recommended that an investor discuss with
their financial professional all materially important information such as risks, ratings and tax implications prior to making an
investment. Past performance is not a guarantee of future results.
This report does not provide recipients with information or advice that is sufficient on which to base an investment decision.
This report does not take into account the specific investment objectives, financial situation, or need of any particular client
and may not be suitable for all types of investors. Recipients should consider the contents of this report as a single factor in
making an investment decision. Additional fundamental and other analyses would be required to make an investment
decision about any individual security identified in this report.