Four of the key measures used to determine stress in the high yield market are approaching or at post-crisis lows: dispersion, distress ratios, default rates and spread per turn of leverage that’s according to Bank of America Merrill Lynch’s regular High Yield Global Strategy research report.
The report, which was published on Wednesday this week, notes that the current high yield environment is one of the most favorable since the financial crisis. And while some investors may interpret this as good news, the report speculates that a skeptic may see these developments as “the peak of the market with little upside left.”
