Junk Bonds doing well

While page C9 [of today's WSJ] runs with Yield on ‘Junk’ Approaching All-Time Low (indeed, the
average yield is down below 7% and the group trades at 3.6% premium to par),
investors in this space will probably like the news the companies have so
radically termed out their debt profile that the amount of liabilities coming due
by 2014 has plunged by 44% over the past two years (Bloomberg runs a
fascinating story on this — Debt Maturity Wall Crumbles by $482 Billion). Fully
56% of the new debt issuance last year was for refinancing purposes. Everyone
seems to believe that the equity market is the only game in town, but the high-
yield corporate bond market generated a net positive return of 15% last year
and this followed on the heels of a 58% gain in 2009 (and up 2.5% so far this
year). Good thing we have been positive on the group — and the sector, without
much fanfare, it has smoked the stock market by 3,400 basis points in total
return spread over the past two years.
---Rosenberg today