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Frustrated with low yields

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Frustrated with low yields? High yielding corporate bond issuances are in vogue with high net worth investors. Australia's embryonic high-yield bond business is growing fast thanks to burgeoning demand from yield-starved wealthy individuals - a trend that may be loosening up the nation's conservative debt market. Two factors are driving the surge in high-yield issuance: Higher capital costs which mean banks are now less willing to lend to riskier unrated companies, and low interest rates globally pushing investors to take on more risk to get decent returns. In the past 18 months, seven firms sold a combined A$1.5 billion ($1.39 billion) in local high-yield debt, up from zero just two years ago, ThomsonReuters data shows. Besides Qantas (QAN.AX), which lost its investment-grade rating earlier this year, most borrowers are small unrated businesses and are new to the bond market. Read the full article from Reuters: (VIEW LINK) @jshillington


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