3 Reasons Why USHY's Yield Could Still Be Attractive Despite Its Low Spread Over IG Bonds
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The article discusses the potential attractiveness of USHY's yield despite its low spread over investment-grade bonds. It highlights that USHY's exposure to BB and B-rated bonds, which have shown a lower than average default rate in 2025, and the rising net leverage in IG bonds could lead to more fallen angels, indicating the market is pricing in this risk.
February 13, 2025 | 5:00 pm
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USHY's yield remains attractive due to lower default rates in BB and B-rated bonds and potential fallen angels from IG bonds.
The article suggests that USHY's yield is attractive due to its exposure to BB and B-rated bonds, which have shown lower default rates. Additionally, the potential increase in fallen angels from IG bonds due to rising net leverage could benefit USHY, as the market is pricing in this risk.
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