Pattullo sees declining spreads in credit market

hendersons' bond manager identifies reasonable value in high-yield

Sector and stock specifics are the key to finding value in the corporate bond market, in the eyes of Hendersons' director of retail credit John Pattullo. He pointed out the Barclays non-gilt spread over UK government bonds have been declining since mid 2000, down from 140 basis points over to around 70, suggesting there was not much more value to be had from this part of the market. However he also cited research by Merrill Lynch, that demonstrates investment grade sector spreads over gilts vary widely among different sectors - from in excess of 200 basis points over for preference shares...