lehman-favours-bank-cap-bonds-and-highyield-debt

Lehman favours bank cap bonds and high-yield debt

The bank advises bond investors to consider opportunities in Asian bank cap securities and high-yield credit.
Lehman BrothersÆ credit research team is recommending investors find opportunities in Asian bank capitalisation bonds and high-yield corporate debt, given an economic outlook for a æsoftÆ landing of the United States economy, with stable US interest rates, tight corporate spreads and the threat of leveraged buyouts in the corporate sphere.

This also reflects a view that Asian high-yield credit is relatively more attractive than high yield in America, says Pradeep Mohinani, senior vice president for Asia credit research at Lehman in Hong Kong. And similarly, bank cap securities are priced wider than corporates.

He believes the current inversion in the US Treasury yield curve is due to structural factors ie, huge demand from Asian central...
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