High-yield bond spreads have tightened significantly from the record-wide levels reached during the 2008 financial crisis. However, spreads are still wider than the lows reached in the 2005-2007 period. We believe that high-yield spreads may have some room to tighten further as credit is improving, economy continues to grow, there is a lot of cash on corporate balance sheets and defaults remain low.
(Source: Bloomberg)
