Higher-rated corporate debt might not be the best trade. Goldman weighs in on credit quality
Why higher-rated corporate debt might not be the best trade Skip Navigation Markets Business Investing Tech Politics & Policy Video Watchlist Investing Club PRO Livestream Menu Investors are reassessing positioning within corporate credit across the quality dimensions by using rating classifications as a proxy, amid higher real rates and an elevated AI-related supply, according to Goldman Sachs. "The catalyst has been the growing tension between solid fundamentals and challenging supply technicals within certain 'high quality' rating cohorts," Goldman said in a note Thursday. While the highest rating categories in investment-grade (AA) and high-yield (BB) constitute the highest share of debt issuance historically, their longer duration profiles and thinner spreads also mean that their returns tend to be the most sensitive to higher interest rates, Goldman said. Goldman noted that lower-rated debt has been outperforming even as investors focus on quality, adding t...
Comments
Post a Comment