Money Managers Eye Junk Debt as High-Grade Yields Drop

The video discusses the record-breaking bond sales in 2020, particularly in the junk bond market, and explores investor interest and market trends. It highlights the challenges investors face in the secondary market and new issuance, with a focus on refinancing and yield search. The video also provides a global perspective on bond sales, including emerging market opportunities and investment strategies.

What was significant about the bond sales in 2020?

• They were the lowest in a decade.

• They broke the record set in 2012.

• They were primarily government bonds.

• They saw a decrease in junk bond sales.

What is a major challenge for investors in the current junk bond market?

• High interest rates

• Oversubscription of deals

• Lack of refinancing opportunities

• Decreasing demand for junk bonds

How are companies taking advantage of the current market conditions?

• By issuing new bonds at higher rates

• By avoiding the bond market altogether

• By refinancing existing debt at lower coupons

• By reducing their overall debt levels

What shift in investment strategy is being observed among large money managers?

• Moving away from bonds entirely

• Focusing solely on high-yield bonds

• Investing in taxable municipal bonds

• Avoiding emerging markets

Why are investors looking at emerging markets?

• To reduce investment risk

• To focus on domestic opportunities

• To find higher yields

• To avoid currency fluctuations