CAM High Yield Weekly Insights

(Bloomberg)  High Yield Market Highlights

• US junk bonds are set to snap a three-week streak of gains as the US-Iran standoff unsettles investors and drives oil prices higher. Yields have climbed 19 basis points in the past five sessions to 6.94%.
• Meanwhile, still attractive yields and tight spreads produced a supply surge in the primary market. Core Scientific and Edged Compute drove the week’s supply to more than $8.5b, with half of that volume coming from bond sales to fund data center buildouts.
• Core Scientific is the fourth borrower in a week to sell bonds for data centers. That helped push monthly volume to nearly $31b, the busiest April since 2021 and the busiest month since September
• Data centers alone have accounted for more than $13b in April. Meridian Arc Holdco, CoreWeave and Edged Compute also borrowed to finance data centers
• With corporate earnings in focus, guidance and post-earnings supply will be key near-term drivers for credit markets, even as Middle East and AI risks linger, Barclays strategists Brad Rogoff and Dominique Toublan wrote on Friday

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.