Norris said his firm has been opting to buy relatively safer securities in the BB ratings tier, even if risk premiums on them are lower. Spreads on B and BB bonds have seen the biggest contractions in the corporate credit market this year, with the extra yield on BB bonds reaching a new post-credit crisis low of 1.81% over Treasuries on Monday.
“It’s really been the weaker credits that underperform in that environment,” Norris said. “I don’t think we’re out of the woods yet.”
--With assistance from Michael Gambale.
This article was provided by Bloomberg News.