• The investment grade debt market has been significantly impacted by the COVID-19 pandemic. Moody’s has downgraded roughly $80B year to date, including $50B in March, while Standard & Poor’s has downgraded ~$180B year to date and $130B in March. How much more will be downgraded depends on many factors including the continued length and severity of the outbreak and the pace of economic recovery.
  • Fiscal and monetary stimulus programs are providing access to liquidity to help companies get through this crisis. It’s too early to assess fiscal effectiveness, as economies are still in “lockdown” mode. We believe more stimulus programs will almost certainly be required for businesses, industries and consumers.
  • The team believes that loosening and appreciably higher yields/spreads have attracted bond investors back into the market. As mid-April, the team has seen record amounts of new issue supply.