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Weekly Market Summary

Feb. 13 to Feb. 17, 2023

View Current Performance

Extra Credit*

  • There is no lack of yield in investment grade corporate bonds, as all parts of the credit curve are now yielding above 5%. Short, intermediate, and long investment grade credit currently yield: 5.22%, 5.21% and 5.48%   (Bloomberg U.S. Credit, as of Feb. 16, 2023).
  • Given spread compression this year so far for credit, investors may now benefit a little less from stepping down in credit quality, albeit marginally, as BBB credit currently (Jan. 31, 2023) yields 5.62% vs. 7.10% for BB high yield bonds. At the same time last year (Jan. 31, 2022) BBB credit yielded 3.39% vs. 4.72% for BB high yield bonds.
  • Loans priced $80 and below have increased to 4.95% (Jan. 31, 2023) from 1.84% (Jan. 31, 2022), while loans priced over $90 and including $100 has increased to 83.21% (Jan 31, 2023) vs. 74.78% (Jan 31, 2022). Therefore, we believe investors are becoming more selective and favor better performing loans.
  • The trailing 12-month default rate for high yield bonds and bank loans finished at 1.83% and 1.82%, well below their long-term average of 3.2% and 3.1% (JPM, as of Jan. 31, 2022).

Yield as of:
Feb. 17, 2023
High-Yield Bonds
Investment-Grade Corporates
Last Week
Prior Week
Start of the Year
Option Adjusted Spread as of:
Feb. 17, 2023
High-Yield Bonds
Investment-Grade Corporates
Last Week
426 bps
533 bps
113 bps
Prior Week
414 bps
525 bps
111 bps
Start of the Year
469 bps
592 bps
121 bps
Prices as of:
Feb. 17, 2023
High-Yield Bonds
Investment-Grade Corporates
Last Week
Prior Week
Start of the Year

*Source: Morningstar®, Bloomberg, Credit Suisse. OAS is Options Adjusted Spread. 4-year discount margin is used for spread for bank loans. Yield quoted is yield-to-worst or equivalent calculation. YTD Low / High for yields are based on end of week and not intraday movements. Indexes and sub-indexes: Investment-grade corporates represented by Bloomberg US Corporate Bond Index. High-yield bonds represented by Bloomberg US Corporate High Yield Index. Bank loans represented by Credit Suisse Leverage Loan Index. The red and green arrows depicted under Yields, Option Adjusted Spreads, and Prices indicate a higher or lower value from the previous week.

Past performance does not guarantee future results. Index performance is not indicative of fund performance. Indexes are unmanaged and it is not possible to invest directly in an index.

Any discussion of individual companies is not intended as recommendation to buy, hold or sell securities issued by those companies. Aristotle Fund holdings can be found on the fund pages linked above.

Investors should consider a fund’s investment goal, risks, charges, and expenses carefully before investing. The prospectus and/or the applicable summary prospectus contain this and other information about the Fund and are available from AristotleFunds.com. The prospectus and/or summary prospectus should be read carefully before investing.

Investing involves risk. Principal loss is possible.

Foreside Financial Services, LLC, distributor.

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