Investors may not have to look towards the lower end of the credit ratings spectrum in order to earn higher yields than those currently available in investment grade corporate bonds.
In a world in which trillions of dollars of government bonds trade at negative yields, the regular cashflows available from investment grade corporate bonds can be too low to help investors meet regular cash ow requirements. Therefore many institutions have been forced down the risk spectrum. However, this could be a strategy that inflicts pain in an environment of economic uncertainty and heightened political risks.
A solution such as secured nance – which potentially offers higher yields without imposing higher credit risks – could be worth considering instead.
What is secured finance?
Secured nance is a multi-trillion dollar global market place incorporating a range of public and private investments which share the common feature that they are secured by collateral and a recurring income stream.
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