Lower-rated credit rubs out 09 losses

Re-opening of capital markets has been critical to credit health, which has in turn led to the recovery in high-yield markets

The recovery in high-yield markets in 2009, which has been led by lower-rated credit, has been enough to erase the losses from last year. A re-opening of capital markets has been crucial to the recovery in credit. One would normally associate an increase in the supply of a commodity or asset with a fall in its price. However, the opposite effect usually holds for corporate bonds because successful issuance assures the market and drives spreads lower.   Themes and points of interest A number of interesting themes have emerged from our interviews with fund managers. A crucial developmen...