Latest Stories

Drilling A Bit Deeper into High Yield Energy

By Scott Ellis | November 2, 2017

With the energy markets seemingly rebalanced and oil prices hovering near $55 per barrel, we have decided to take a closer look at the Oil Field Services sector. This subsector is the weakest link in the energy supply chain as these companies largely rely on exploration and drilling capital expenditures. It was the most distressed energy subsector in 2016 and has been the last to recover. Still, enough has transpired to suggest a potential inflection point in fundamentals in 2018 or 2019, with many of the survivors effectively extending their own runways via opportunistic refinancings. Despite the spread compression in 2017, as seen in this week’s chart, this subsector of High Yield Energy still has higher credit spreads than the overall High Yield Energy sector and therefore is worth drilling into further (pun intended).

Gross Leverage Shifts into High Gear

By James Faunce | April 6, 2017

Over the last several years, there has been a rather large shift in the amount of gross leverage corporate credits have been willing to endure. Today’s chart shows over 50% of investment-grade corporate debt in the JPMorgan non-financial universe had gross leverage under two times EBITDA* at the end of 2012. By the end of 2016, this fell substantially to 20% of the universe. At the other end of the spectrum, this period saw debt levered over four times EBITDA go from 11% to 25%.

Despite Its Volatility, Stay the Course with Energy

By Trevor M. Williams | January 5, 2017

Like most products and services, the price of oil is a function of supply and demand. During periods of extended oversupply, the price of oil tends to fall.

Can Shifting Electric Supply Power Investment Opportunity?

By Justin Kaplan | March 10, 2016

This week’s chart shows the shift in U.S. electricity generation since 2000. Regardless of which side of the Climate Change debate you come down on, the trends toward cleaner power generation in the U.S. are difficult to question.

2015 Lessons Learned: 3 Takeaways for Investors

By Mark Heppenstall | January 4, 2016

Here are a few key lessons investors learned (again) during 2015. Today also marks a key milestone for our company and our investment team as we enter the private market with the launch of a private fund. The fund marks our entrance into the private market and is an outgrowth of our firm’s depth and expertise as fixed income managers.

Yuan Devaluation Surprises Market

By David O'Malley | August 17, 2015

Last week’s surprise announcement from the Chinese government devaluing the Yuan affected markets across the globe.

The Commodity Bloodbath Accelerates

By Greg Zappin | August 13, 2015

It has been a horrible few months for the commodity complex (oil, natural gas, met coal, thermal coal, copper, aluminum, steel, gold, etc.).

Energy Companies Demonstrate Resilience with Stock Issues

By Greg Zappin | April 9, 2015

To their credit, as it became clear that oil prices would stay lower for longer, the management teams of energy companies responded aggressively.

All is Not Lost with Energy Market Volatility

By Trevor M. Williams | March 5, 2015

Since last year, the price of West Texas Intermediate (WTI) Crude Oil has approximately halved – experiencing considerable volatility on its way down.

Will the Broader High-Yield Market Continue to Decouple from Energy?

By Greg Zappin | January 22, 2015

This week’s chart depicts the bifurcation in spreads and performance between energy- and non-energy-related bonds in the JPM HY Index.

Disclosure Statement

The material provided here is for informational use only. The views expressed are those of the author, and do not necessarily reflect the views of Penn Mutual Asset Management.


This material is for informational use only. The views expressed are those of the author, and do not necessarily reflect the views of Penn Mutual Asset Management.  This material is not intended to be relied upon as a forecast, research or investment advice, and it is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.

Opinions and statements of financial market trends that are based on current market conditions constitute judgment of the author and are subject to change without notice.  The information and opinions contained in this material are derived from sources deemed to be reliable but should not be assumed to be accurate or complete.  Statements that reflect projections or expectations of future financial or economic performance of the markets may be considered forward-looking statements.  Actual results may differ significantly.  Any forecasts contained in this material are based on various estimates and assumptions, and there can be no assurance that such estimates or assumptions will prove accurate.

Investing involves risk, including possible loss of principal.  Past performance is no guarantee of future results.  All information referenced in preparation of this material has been obtained from sources believed to be reliable, but accuracy and completeness are not guaranteed. There is no representation or warranty as to the accuracy of the information and Penn Mutual Asset Management shall have no liability for decisions based upon such information.

High-Yield bonds are subject to greater fluctuations in value and risk of loss of income and principal. Investing in higher yielding, lower rated corporate bonds have a greater risk of price fluctuations and loss of principal and income than U.S. Treasury bonds and bills. Government securities offer a higher degree of safety and are guaranteed as to the timely payment of principal and interest if held to maturity.

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Copyright © 2014 Penn Mutual. All Rights Reserved. All trademarks are the property of their respective owners.

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