Better environment for higher yield companies

Falling defaults, low interest rates and an improving global economic situation are making the opera...

Falling defaults, low interest rates and an improving global economic situation are making the operating environment for companies in the high yield sector attractive, according to Rod Paris, head of global bonds at Standard Life Investments. The yield spread in the corporate bond market has continued to narrow as investors' risk tolerance has increased and as many remain focused on higher income securities, Paris says. He adds: "The conditions have been right for high yield bonds for two years, with low interest rates, a gradual economic recovery and a falling default rate among issuers....