Invest Like the Best with Patrick O'Shaughnessy Bryan Krug – An Update on Corporate Credit - [Invest Like the Best, EP.161]
Mar 13, 2020
In this engaging discussion, Bryan Krug from Artisan Partners shares his expertise on corporate credit markets, focusing on high-yield and investment-grade bonds. He examines the recent shifts in the market due to global events and compares today’s environment to past financial crises like 2008. Bryan highlights significant sectors in the high-yield market beyond energy, explains risk pricing, and warns equity investors about key indicators to watch. With insights into upside potential and the loan market, he offers a balanced view of current challenges and opportunities.
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Market Turmoil
- The high-yield market has changed drastically due to the coronavirus and the oil price war.
- These shocks have led to a repricing of risk and a panic similar to 2008.
Energy Sector Analysis
- The energy sector in the high-yield market is smaller and higher quality than five years ago.
- Current valuations are much lower, with most bonds trading below 75 cents on the dollar.
High-Yield Market Composition
- The high-yield market is diverse, with major sectors including TMT, energy, and healthcare.
- Fallen angels, investment-grade credits trading like high-yield, present opportunities.