Factors that have contributed to strong earnings growth this year will fade in 2019 and turn into headwinds in 2020, exposing leveraged corporate borrowers.
Steady performance despite market volatility in the first half of 2018 validates the sector’s defensive profile.
Supply weighs on CLO markets, but opportunities abound in commercial ABS.
Rising net supply of institutional loans has weighed on performance, but rising carry attributed to higher Libor continues to attract inflows.
Full-term interest-only loans and higher debt service coverage ratios support AAA-rated interest-only bonds.
Borrowers continue to benefit from low interest rates and an abundance of capital, but values may be coming down.
Technical dynamics weigh on high-yield rallies despite improving fundamentals.
Strong market fundamentals are leading to an increase in lower-rated investment-grade debt that may struggle as rates rise.
A spate of recent Supreme Court decisions should help boost state and local government revenues.
The long-running rally has emboldened dealers while investors have tempered their risk appetite.
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