DoubleLine Research Paper on the Outlook for U.S. Corporate Investment Grade Bonds
TAMPA, Fla., Dec. 14, 2023 /PRNewswire/ -- The outlook for investment grade (IG) corporate credit is more favorable than it has been in a decade, Robert Cohen, Director of Global Developed Credit at DoubleLine, and Product Specialist Colin Callahan, conclude in a new research paper.
To read the paper, titled "Investment Grade Corporate Bonds: A Convergence of Yield, Duration and Credit Advantages," please click on the following link: https://doubleline.com/wp-content/uploads/DoubleLine-Investment-Grade-Corporate-Outlook_12-9-2023.pdf
"The yield, duration and credit quality foundation provide an opportunity to construct a high-quality portfolio with a positively skewed return profile with the potential to generate high single-digit returns while running limited downside risk," Messrs. Cohen and Callahan write. They explore the key ingredients in this outlook: yield per unit of duration, all-in yields, credit spreads and rating migration. Then they review the widespread use of longer-term financing by IG issuers during the years of historically low borrowing costs and its significance as an offsetting mitigant of refinancing risk around the timing of debt "maturity walls," a colloquial term for when maturities arrive en masse. Finally, the paper breaks down select sectors of this investment universe into positive and negative outlooks.
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