Apr 2022

Relative Value in Securitized Credit: Prepare to Nibble

The combination of higher Treasury rates and wider credit spreads has led to higher all-in yields across the capital structure, which represent more-attractive levels today relative to even just a few months ago. At the top of the capital structure, yields are in the range of mid-3% to mid-4%. The mezzanine portion of the capital structure is pricing yields in the mid- to high single digits. Relative to history, senior-rated bonds are trading at some of the highest yield levels in nearly five years.