WisdomTree Launches Active Global Corporate Debt ETF
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Sun, May. 11, 5:47 AM
- Delek Drilling (DKDRF) and Avner Oil (AVOGF) have raised $2B in international bonds that the companies will use to finance the development of the massive Leviathan natural-gas field off the coast of Israel.
- The offering attracted demand of $13.5B and was over-subscribed by 650%.
- Avner and Delek Drilling, which are subsidiaries of Delek Group (DGRLY), hold a combined 45.34% in Leviathon, while Noble Energy (NBL) owns a stake of 39.66% and is the field's operator. Ratio Oil (RTEXF) holds the remaining 15%; Australia's Woodside Petroleum (WOPEF) has agreed to buy 30% from the partners.
- ETFs: GHYG, IBND, PICB, CEMB, GLCB
Mon, Mar. 3, 4:32 PM
- Eyeing better growth and sustained low interest rates, Moody's projects the global default rate to drop to 2.2% this year or 61 companies globally, from 2.9% or 66 companies in 2012.
- "Additional factors that support our view of a low default rate in 2014 are the continuous accommodative monetary environment together with ample liquidity, which has and will continue to allow distressed companies to access the capital market and reduce refinancing risk in the near future."
- For perspective, the average default rate since 1983 is 4.7%. It is indeed a golden age for corporate borrowers.
- Related ETFs: LQD, VCSH, VCIT, CORP, VCLT, CSJ, EMCB, CIU, CFT, EMCD, SCPB, LWC, GHYG, CLY, IBND, ITR, CEMB, PICB, QLTA, GLCB, IGHG, SLQD, PFIG, IGS, CBND, IGU, QLTB
Jul. 23, 2013, 1:34 PMWith rising rates forcing some issuers out of the market, Moody's expects the U.S. high-yield (HYG, JNK) default rate to rise to 3.2% by November from 2.9% now. It's hardly bad news as that's still well below the 4.5% average since 1993 and the peak rate of 14% in 2009, and Moody's expects the default rate to fall to 2.6% by mid-2014 as issuers return to the market once volatility subsides.
Jul. 22, 2013, 8:51 AM
Jul. 10, 2013, 3:51 PMYes, there's been a deterioration in underwriting standards in the high yield market (HYG, JNK), writes Scott Minerd, but it's far from pre-crisis excesses and secondary to other concerns - namely higher rates. To protect against rates, he prefers bank loans (BKLN, SNLN) - senior to high yield paper and floating rate. B-rated bank bonds have barely budged since rates began moving higher in May while BB-rated notes (junk) have declined 3.9%. | Comment!
Jun. 26, 2013, 2:48 PMAttempting to answer the question of what the world would look like if the 10-year Treasury yield climbed to 4% while short rates remained about zero, Marty Fridson says spreads on high yield (HYG, JNK) and investment-grade (LQD) corporates would widen to levels seen at the time of the Lehman failure. He's quick to point out this is a stagflation scenario, but if the yields rose because of a booming economy, it would be a different result for corporate paper. | Comment!
Jun. 5, 2013, 10:09 AMVanguard finally moves into the international and emerging bond market ETF space, launching today its Total International Bond ETF (BNDX) with expense ratio of 0.20% and its Emerging Markets Government Bond ETF (VWOB) with expense ratio of 0.35%. Both are hedged against currency exposure. Possible competitors include: GLCB, IGOV, EMB. | Comment!
Jun. 1, 2013, 8:48 AMYTD junk bond issuance hits $254B globally, up 53% Y/Y. In the U.S., issuance is up 24% at $130.6B in the first five months of the year and some say the frothy market (see: 5% yield barrier broken) is ripe for a correction. In fact, data suggest cracks are already starting to show in the secondary market: investors pulled a combined $660M from HYG and JNK last week, as fears mount regarding the dreaded "taper". (Previously: Lousy month for high yield; anomalous high yield/ muni spread tightens) | 1 Comment
May. 31, 2013, 3:04 PMA nasty close is in store for a lousy month for high yield (HYG -1%) as it loses some appeal amid now-visible Treasury rates. The yield spread over Treasurys was nearly 500 bps a year ago, but just 400 now. Through yesterday, investors have pulled about $1.5B from HYG and JNK according to IndexUniverse. Not falling as far as the index funds and actually seeing inflows this month is AdvisorShares' actively-managed high yield ETF (HYLD). | 1 Comment
May. 24, 2013, 11:54 AMA bit of selling by investors in high-yield ETFs (HYG, JNK) has Wall Street banks stepping in - their holdings of junk paper rising 37% to $7.7B in the last 2 weeks. Also at work suggests JPMorgan's team is banks' - used to being cautious the past few years - becoming a little more comfortable with trading activity. | Comment!
May. 20, 2013, 12:30 PMThe hot market for corporate junk (HYG, JNK) has pushed the yield on high-yield corporates (4.88%) well below that of high-yield municipals (5.22% nominally, over 8% on a tax-equivalent basis). The nominal spread of 34 bps is down from 56 bps a week ago as investors take notice of the anomaly. High-yield muni ETFs: HYD, HYMB, XMPT. | 4 Comments
May. 20, 2013, 9:47 AMUBS' 5 "suspected" asset bubbles: 1) Risk-free rates - specifically Treasurys (TLT), Bunds (BUND, BUNL), JGBs (JGBL, JGBT, JGBD, JGBS) 2) Credit (HYG, JNK) 3) Real estate in Asia (WPS) 4) Certain EM equity markets (EIDO, IDXJ, EPHE, THD, EWW) 5) Australian banks (WBK, NABZY.PK, ANZBY.PK, CMWAY.PK). | Comment!
May. 10, 2013, 5:57 AMDon't panic, Moody's says, there's "no strong evidence that recent [corporate debt] issuance levels presage a damaging correction." The notion that a bubble is building in the corporate bond market isn't reflected in credit spreads which, for both investment grade (LQD) and high yield (HYG, JNK), are closer to long-run averages than they are to alarmingly tight. Furthermore, the ratings agency says a surge in issuance reflects the "disintermediation of the banking sector" and notes that the proportion of total corporate liabilities comprised of debt securities hasn't significantly increased over the past two years." We can all rest easy now. (previous) | 2 Comments
May. 8, 2013, 11:38 AMThe 5% yield barrier on junk bonds (HYG, JNK) is broken for the first time ever, the Barclays U.S. High Yield Index sliding to 4.97% (prior to Jan., the yield had never fallen below 6%). Spreads to Treasurys remain at a not-unreasonable 406 bps, far wider than the record-tight 223 points reached just as the gates of financial heck were about to open in 2007. In the meantime, the equity of highly non-wobbly companies like RDS.A, VOD, and GSK yields in the area of 5%. "We don't want to question the market," writes the FT's David Keohane, "but: what the (heck)?" | 7 Comments
May. 6, 2013, 1:04 PMIt's an easy market to hate, but junk bond prices (HYG, JNK) keep going higher, the yield on the benchmark BAML index hitting an all-time low of 5.084%. The spread to Treasurys - treading water for awhile at 475 bps - has broken through that resistance, and is now at 4.33%. The Fed's role here is well-documented, but the latest meme has the BOJ's easing efforts as forcing a fresh wave of cash into the sector. | 8 Comments
Apr. 12, 2013, 12:28 PMFixed-income may not be being given away as it was in 2010, but there's still value, says Jeff Gundlach, scoffing at talk of a bond bubble. "Raise your hand" if you own Treasurys for yourself or a client, he asked a room full of advisors (none went up). Bonds are not "over-owned" in the U.S., he says, showing cash and fixed income make up a higher percentage of household financial assets in other countries. | 5 Comments
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The WisdomTree Strategic Corporate Bond ETF seeks to provide a high level of total return consisting of both income and capital appreciation through investments in the debt of corporate issuers from countries throughout the world.
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