Trichet won’t kill the high yield market
While interest rates have been at record lows, Europe’s junk bond market has thrived. But Jean-Claude Trichet’s hint of an imminent rise should not cause investors to retreat. There are still plenty of reasons to buy high yield paper.
Europes high yield market faces a stern test over the coming weeks as investors digest last Thursdays comments from ECB president Jean-Claude Trichet, in which he implied that the bank could raise interest rates in April.
High yield borrowers have thrived over the last 18 months with base rates
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