Welcome to Thoughts in the Market.
I'm Andrew Sheets, head of Corporate Credit Research at Morgan Stanley.
I'm Neville Mandimica from the Emerging Markets Credit Strategy team with a focus on Simeo.
I'm Anlan Zang, US Credit Strategist.
Today on the program, we're going to talk about high-yield bonds in the US and emerging markets,
and why we think emerging markets, or EM, in many cases offer better opportunity.
It's Friday, March 21st at 2 p.m. in London.
It's 10 a.m. in New York.
So Neville and Anlan, it's great to talk to you,
and I want to talk to you about a recent report that we all wrote looking at the market for high-yield bonds in both the US and emerging markets.
In some ways, these two markets are similar.
Both represent bonds with ratings below investment grade.
Both are denominated in US dollars, and both offer more elevated yields.
But they're also quite different.
The US high-yield market represents lending to companies in the United States.
The EM market, for our purposes, represents lending to countries.
So Neville, that's where I'd like to start.
When you think about that risk of lending to countries that carry lower ratings,
what are some of the key metrics that you look at to determine if you're being compensated for that risk?
We look at three distinct factors.