Tag Archives:

high yield bonds

How severe is the current energy sector default cycle?

To date the defaults we’ve seen in the US high yield market have largely occurred in the energy/commodity sectors. To see whether this trend is likely to persist I spent some time comparing the current default cycle with that of the US telco sector in the early 2000’s (see also James’ recent blog for the parallels between today’s high yield market and that of 2001).

The telco bust occurred slig…

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Beautiful Game, Ugly Investment

Travelling back from Sunday’s draw between Liverpool & Arsenal (it was never a sending off), I noted Liverpool Football Club had again made the business pages for all of the wrong reasons (see here).

The current battle between RBS, the principal creditor to LFC, and its owners Tom Hicks and George Gillett continues to highlight the dangers of utilising leverage to buyout companies in certain in…

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Michael Milken

The ‘founder’ of the High Yield market, Michael Milken, was in town yesterday at a conference I attended. Mike is the guy who restarted the High Yield market in the 1980’s (high yield bonds were around during the great depression) when he saw great returns available on fallen angels. Mike served 22 months and paid almost a billion dollars in fines for securities fraud after making a fortune at …

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