Perceived Risk on High-Yield Bonds Surges Relative to Investment-Grade Debt

The video discusses recent trends in credit markets, highlighting the underperformance of investment grade debt compared to high yield bonds. It explores the shift in risk perception, with high yield bonds now seen as riskier. The video also examines the transition in the credit cycle, focusing on credit risks and the decline in bond issuance. Finally, it considers the future implications of these trends, suggesting a potential retrenchment in the credit market.

What has been the trend in high yield bonds since the beginning of October?

How has the perceived riskiness of high yield debt changed relative to investment grade bonds?

What was the market sentiment towards investment grade bonds earlier in the year?

What does the current credit cycle indicate about the default probability of companies?

What significant event occurred in 2008 that affected high yield bond issuance?