Institutional investors are starting to pour money into both investment grade and high-yield corporate bonds to take advantage of historically high spreads over US Treasuries, according to Payden & Rygel Global, a London-based asset manager.
However, investors are still wary of the debt of financial companies such as banks, as well as newer style bonds typically issued in the past three years that are secured on the balance sheet of a subsidiary or assets such as mortgages, rather than on the parent company.
“This is not a blind headlong rush back into corporate credit, this is people who have been frightened off, haven’t got all their confidence back but can see targeted opportunities,” said Robin Creswell, managing principal of Payden & Rygel Global. “The people we are talking to explicitly do not want exposure to financials, or, if they do, they want to limit it to those with government backing.”
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