Bank Regulation: A New Opportunity in Credit?

Posted by Jorgen Kjaersgaard (pictured) and Steve Hussey of AllianceBernstein (NYSE: AB) European banks are issuing new subordinated bonds that can be written off in a crisis. For investors who are willing to take the risk, our analysis suggests these bonds may provide a way to beat the low returns in today’s corporate bond market.

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Sovereigns Look Seductive in Europe’s Periphery

Jorgen Kjaersgaard (pictured) and John Taylor Investment-grade bonds issued by nonfinancial firms in Europe’s peripheral countries have had a great run but now look expensive. In our view, government bonds from the likes of Spain and Italy offer better value for investors who want peripheral exposure.

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Euro High Yield: Defaults Are Not the Biggest Concern

High-yield default rates have been unusually low over the past couple of years and now look as though they are on the cusp of a reversal. But default rates in themselves could be less damaging to high-yield bond returns than rising government bond yields.

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Don’t Be Afraid of European High Yield…
Be Selective

The European financial crisis continues to challenge high-yield investors. Some were wary of Europe’s issues and stepped away last year, only to see European bonds dominate through the unpredictability. Others want in now, but worry that they’ve missed the rally.

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Time to Buy Peripheral Corporate Bonds?

Amid growing confidence in euro-area authorities’ response to the regional debt crisis, yield-hungry investors have been returning to the riskier categories of corporate debt, including the peripherals: Portugal, Italy, Ireland, Greece and Spain. Is it safe to go back into the market?

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Cracks Appear in Europe’s Credit Rally

We’ve seen some dramatic price moves in the riskier European bonds since 26 July, when European Central Bank (ECB) president Mario Draghi assured the markets that “whatever it takes” would be done to save the euro.

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The Opportunity in European
High-Yield Financials

European bond markets have been volatile in recent months, with high-yield financials suffering some of the worst turbulence. But we’ve seen this kind of volatility before, notably in 2008/2009. That bloodbath was followed by a highly lucrative rally. 

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The European Bond Markets Today:
Be Selective, Be Risk-Aware

Continued uncertainty and volatility are forcing European bond investors to think on their feet.  But there are ways to generate yield without taking excessive risk. 

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Rules of the Game Have Changed for Euro High-Yield Investors

The European sovereign debt crisis has changed the rules of the game for euro high-yield investors. Fixed-income managers are being challenged to think differently about both the risks and the opportunity set.

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