Report
Euro zone: Why the contrast between High Yield bonds and equities?
High Yield credit spreads in the euro zone have tightened considerably, to the point that they no longer cover the average default risk on High Yield bonds. Equity risk premia, on the contrary, are extremely high and practically at a crisis level. Why this difference between High Yield bonds and equities? Because equity investors do not believe the low interest rates are permanent? Because many investors are forced to remain in the bond universe? Because the risk of a decline in earnings is expected to be far more serious than the default risk?
Provider
Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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