Invesco - Mon, 10/16/2023 - 11:55

A rise in senior secured bonds lifts high yield

An increase in secured high yield bond issuance has improved the credit quality of the high yield asset class, in the view of the Invesco High Yield Team. We speak with Senior Portfolio Managers Philip Susser and Stuart Stanley about why secured bond issuance has grown and what it means for the US high yield market.

Overview

The historically higher recovery rates of secured bonds and their higher position in the capital structure add extra protection for bondholders.
The growth of secured bond issuance in the high yield market has improved high yield’s overall credit quality.
We believe the rising proportion of secured bonds in the high yield market presents a unique opportunity, based on their attractive valuations and potential investment performance.

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Invesco

Invesco is a leading independent global investment management firm, dedicated to helping insurance investors achieve their financial objectives. We understand insurers have unique investment needs, from optimizing capital efficiency and yield, to managing reserves and reporting. That’s why we offer specialized solutions across a broad set of asset classes and vehicles. With $1.8 trillion in total assets under management,[1] and $56.1 billion on behalf of insurance general accounts,[2] we strive to understand your distinct capital requirements, accounting tax treatment, and risk factors.

Invesco Advisers, Inc. and Invesco Senior Secured Management, Inc. are investment advisers that provide investment advisory services to Institutional Investors and do not sell securities. Invesco Distributors, Inc. is the distributor for Invesco's retail products. Invesco Advisers, Inc., Invesco Senior Secured Management, Inc. and Invesco Distributors, Inc. are indirect wholly owned subsidiaries of Invesco Ltd.

¹ Invesco Ltd. AUM of $1,795.6 billion US as of September 30, 2024
² As of December 31, 2023

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