Christian Hviid HY bonds pricing ca. 6.7% default rate. Par-weighted DR has been running 1.2%. This spells opportunity (I am long HYG as of this posting).
10/21/11
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Christian Hviid: Assuming bad case scenario of 4% defaults you are still looking at ca. 605bps spread vs. current 795bps. With 4.4 duration the math works.
10/21/11
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*Hysteria: HY works unless you funded the investment from equities...bc if equities go up 20%...HY will lag
Christian Hviid