THE 2004 ALL-EUROPE FIXED-INCOME RESEARCH TEAM

摘要

European investors regained their appetite for credit risk in 2003. From a high of 1,398 basis points late in 2002, junk-bond option-adjusted yield spreads narrowed to 392 basis points by the end of 2003. The diciest part of Citi-group's bond index ╚D CCC-rated credits ― returned a whopping 46 percent for the year, besting the overall corporate market's solid 8 percent return. Bolstered by stronger economic growth in the U.S., Asia and parts of Europe, emerging-markets sovereign debt issues on average provided a robust total return of 26 percent. Perhaps the clearest signal that the market was comfortable with risk: Russia's sovereign debt returned 22 percent; in the fall, Moody's Investors Service deemed the country an investment-grade credit. "In 2003 if you went long on the credit market you would have made money," says Katharine McCormick, head of corporate credit research at J.P. Morgan. "In fact, the worse the credit, the more it tightened."