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Weekly Market Summary
Feb. 6 to Feb. 10, 2023
Extra Credit*
• Despite the relative upturn to start the year, January was the slowest start for the high-yield primary market in four years at $20.6 billion. The peak for the month remains at $51.9 billion (Jan ’21).
• In January, 35% of the new high-yield bond supply came with BB ratings, while a further 25.2% of the supply straddled the BB/B divide. Single-B bonds represented 34.2% of prints, while CCC paper accounted for just 2.8%.
• Current probabilities for the fed funds rate upper limit per CME FedWatch to finish at either 5.25% or 5.75% post May FOMC meeting, so either two 0.25% or two 0.50% hikes in the Fed’s benchmark rate stand at 74.2% or 4.9%.
• The trailing 12-month default rate for high yield bonds and bank loans finished 2022 at 1.83% and 1.82%, well below their long-term average of 3.2% and 3.1%.
Previous reports
*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.
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.
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