When Fear Trumps Greed: Negative-Yielding Bond Pile Grows

The video discusses the prevalence of negative yields in German and Japanese debt markets, highlighting their limited presence in corporate debt. It examines the impact of Brexit on UK property funds and liquidity issues, drawing parallels to past high yield fund challenges. The discussion extends to liquidity challenges in high yield markets, with a focus on distressed assets and the unique case of 3rd Ave. The video analyzes supply and issuance trends in the high yield market, particularly triple C debt, and the influence of the energy sector on market trends. Finally, it provides an outlook on the high yield market, addressing default rates, earnings decline, and leverage.

What is the main concern regarding negative yields in the corporate sector?

• A large portion of corporate debt is negative yielding.

• Negative yields are a major issue for pension funds.

• Negative yields are primarily found in the US market.

• The impact of negative yields is minimal in the corporate sector.

What was unique about the 3rd Ave fund in the context of liquidity?

• It was a highly liquid fund.

• It was a distressed fund offering daily liquidity.

• It had no issues with liquidity.

• It was primarily invested in equities.

How has the issuance of triple C debt been described in the context of Brexit?

• It is unaffected by Brexit.

• It has increased significantly.

• It is at a recessionary level.

• It has remained stable.

What is the current state of non-commodity high yield sectors?

• They are experiencing strong earnings growth.

• They have stable leverage levels.

• They are facing deteriorating fundamentals.

• They are unaffected by asset writedowns.

What is expected to happen to leverage in non-commodity sectors?

• It will decrease due to improved earnings.

• It will be unaffected by market conditions.

• It will remain stable.

• It will increase due to declining earnings.