Monthly Archives:

August 2017

The decline of covenants in the European leveraged loan market

Guest contributor – Chris Mansfield (Investment Graduate, M&G)

The sustained demand for high yield bonds and European leveraged loans over the past few years, combined with improving corporate fundamentals, has led to strong performance from both asset classes. The large amount of capital available for issuers of higher yielding assets has placed the bargaining power squarely in the hands of th…

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BVTV: Time for a check-up of the US healthcare sector

Heated debates about proposals to repeal and replace Obamacare, generic pharmaceuticals feeling the pain of pressures on drug prices and lingering event risk around potential mergers and acquisitions – there are many reasons to take a closer look at the US healthcare sector right now. On my recent research trip to Chicago I discussed these and other topics with Laura Reepmeyer, Managing Directo…

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Are debt markets and rating agencies giving M&A too much credit?

Guest contributor – Simon Duff (Credit Analyst, M&G Credit Analysis team)

Last week, International TV network operator Discovery Communications announced the US$15bn acquisition of Scripps Networks.  Scripps owns TV networks focused on food, home and travel, so it fits with the factual or “non-scripted” focus of Discovery’s core networks (Discovery, TLC, Animal Planet).  It also offers an oppor…

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BVTV: Have bonds and equities decoupled, and can both be right?

This week, Ritu Vohora, investment director in M&G’s equities team, joined me on the BVTV sofa to discuss the curious case of the de-correlation between equities and bond yields. Why are stocks and bonds both rising at the same time, and which market is giving the true outlook for the global economy?

Also this week: is Venezuelan debt in a death spiral? And what to watch out for in the markets….

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Financial conditions suggest the case for more hawkish Fed than inflation dynamics would suggest

Guest contributor – Jean-Paul Jaegers, CFA, CQF (Senior Investment Strategist, Prudential Portfolio Management Group)

A lot has been written on the recent softness in US inflation data, as headline inflation pulled back, with a similar trend in core inflation. Admittedly, a number of unusual factors have partly been a driver behind this, although more importantly there is quite some persistence…

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Is it time for the Bank of England to sell corporate bonds back to the market?

On August 4th last year, the Bank of England announced a series of easing measures in response to the Brexit referendum results. They were very concerned regarding a potential slowdown and collapse in both the economy and corporate confidence and so implemented a variety of measures; reducing interest rates, increasing liquidity lines for banks, and reintroducing their gilt and corporate bond p…

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