Commodities 'fallen angels' and EM bonds offering best credit opportunities

Investors have plenty of reasons to be pessimistic and fearful of the corporate credit markets today, but there are bright spots as some energy company fundamentals are downgraded to junk*.

China is in a precarious situation which will likely materially impact global growth and liquidity; bond default rates will increase, as will rating downgrades; the disappointing growth outlook - despite central banks' extraordinary policies - is leaving financial markets disillusioned, and voters are creating an important additional global political risk - rising populism. Last, but certainly not least, a tidal wave of new banking regulations has killed the ability of banks to take risk and hence provide liquidity to markets. A bigger than ever proportion of the investment community ...