Fallen Angel Bonds Becoming A Rare Breed

Europe’s bond managers have a problem; they’re struggling to find attractive investments – specifically, fallen angel bonds. Bond managers are finding it increasingly difficult to find yield in a market that’s dominated by the dovish European Central Bank and its large corporate bond purchases.

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The problem for Europe’s bond managers is two-fold. Firstly, junk bonds have been lifted by the rising tide and yields have contracted across the market. Second, companies are being more fiscally responsible. In the second half of last year, three major European high-yield issuers, Tesco, Anglo American and Telecom Italia all benefited from upgrades, debt repayments...