The leveraged credit sector has delivered stellar performance since the lows in March, according to a new report from Guggenheim. The report notes high-yield corporates are up 26 percent from 2020 lows, and bank loans are up 22 percent.
There is still scope for improvement in the level of credit spreads. BBB-rated spreads remain 37 basis points wider than January levels, according to Guggenheim.
BB-rated corporate bond spreads are 124 basis points wider than January levels, and B-rated corporate bonds are 130 basis points wider.
High-yield credit curves remain inverted. In the BB-rated sector, the difference between a nine- to 10-year maturity bond spread and a two- to three-year maturity bond spread is –36 basis points.
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