Bond appetites are growing as more and more investors look to lock in high-yielding assets ahead of an expected decline in interest rates this year.
What To Know: Riskier forms of corporate debt with higher yields are becoming increasingly popular with the Federal Reserve expected to begin cutting rates later this year.
Investors are looking for opportunities to lock in current levels of high interest for years to come, and corporate bonds are one place they are looking. According to Reuters, a change in Moody's approach to ratings last month has fueled the increased demand, especially for high-yielding bonds.
Benzinga used Public.com's bond screener tool to identify some of the highest-yielding investment-grade corporate bonds with maximum liquidity. Here's a look at the results:
- Stanley Black & Decker Inc (NYSE:SWK): 16.04% yield
- Teledyne Technologies Inc (NYSE:TDY): 14.37% yield
- Truist Financial Corp (NYSE:TFC): 11.7% yield
- Quest Diagnostics Inc (NYSE:DGX): 11.64% yield
- Amphenol Corp (NYSE:APH): 11.03% yield
- Enstar Group Ltd (NASDAQ:ESGR): 8.42% yield
- Duke Energy Corp (NYSE:DUK): 8.3% yield
Here's a look at some of the highest-yielding speculative-grade corporate bonds:
- AMC Entertainment Holdings Inc (NYSE:AMC) 33.59% yield
- Hughes Satellite Systems Corp: 32.3% yield
- DISH Network Corp (NASDAQ:DISH): 29.59% yield
- Office Properties Income Trust (NASDAQ:OPI): 28.99% yield
Higher-yielding bonds offer higher interest rates because they have a much higher risk of default. Corporate bonds are also riskier than U.S. Treasury bonds because they are not backed by the government.
When a company with a higher estimated default risk issues bonds, it usually does so with higher rates to try to attract investors who may be considering government bonds or lower-rate corporate bonds with investment-grade credit ratings.
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