Two Ways: Bond Voyage!
{ Posted on Apr 06 2009 by Minyanville }
High-yield bonds could default at a rate of 53% over the next 5 years. According to Bloomberg Jim Reid the head of fundamental credit strategy at Deutsche Bank wrote in a note to clients that the default rate would likely surpass the 31% 5-year level seen in the early part of this decade and the 45% rate seen during the Great Depression. Reid’s estimate is based on the premium investors are demanding to hold the securities. He assumes recoveries from the defaults will be zero. Further Reid believes US property values -- the collapse of which was a chief catalyst ...
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