SLI's Sutherland looks to 'CoCo' bonds as corporate yields come in

Standard Life Investments (SLI) is looking to convertibles for returns in its £106m Strategic Bond fund as investment grade opportunities diminish.

SLI's head of credit Andrew Sutherland (pictured) who is set to retire after 30 years at the fund group, said contingent convertible bonds (CoCos) - the type of hybrid debt issued by Lloyds and Barclays to shore up their balance sheets - present a source of income more safe than their ratings suggest. "There are lots of opportunities in financials," he said. "We particularly like Lloyds - the famous CoCos, which we have been invested in for a while, are now yielding about 7% to 7.5% which still sounds pretty handsome. "They are rated BB so not investment grade, although they are issue...