Ken Leech, lead manager of the $9.4bn Legg Mason Western Asset Macro Opportunities Bond fund, has said a quarter of BB-rated US high-yield bonds could be upgraded to investment grade in the next 18 months.
The CIO of the Legg Mason affiliate Western Asset said a supportive US growth outlook, as well as the removal of stimulus and a gradual increase in interest rates, is resulting in spread sectors offering value for investors. Legg Mason's Herbert: 'We see opportunities in UShigh yield and commodity-oriented markets' He explained the bulk of re-ratings to investment grade is likely to be within "rising star issuers", which his fund focuses on within its 9% exposure to high-yield debt. "In total, we think one in four BB rated bonds could be upgraded in the next 18 months if our outloo...
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