Kroll Bond Rating Agency (KBRA) releases commentary on U.S. corporate credit and how durable we see it being in 2021.
As we head into a new year, credit risk is bid to frothy, if not extreme levels. At KBRA, we have to ask if any of this makes sense. Turns out it does, in our opinion. To be clear, that is not to say that with yields in credit at all-time lows that we believe risk and reward are in alignment. Rather, our view acknowledges that bond market technicals and government support have reduced the relative importance of macro- and microeconomic fundamentals. And we believe this equation is going to hold over the course of 2021, making U.S. credit a durable asset class in 2021.
Risks to our view include an unexpected inability of vaccines and therapeutics to bring the pandemic under control, an unforeseen spike in rates, a significantly destabilizing geopolitical event, or a substantial increase in debt-financed M&A.
To view the report, click here.
About KBRA and KBRA Europe
KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe is located at 6-8 College Green, Dublin 2, Ireland.
Van B. Hesser, Senior Managing Director and Chief Strategist
+1 (646) 731-2305
Dana Bunting, Senior Managing Director
+1 (646) 731-2419
Kai Chan, Senior Director
+1 (646) 731-2303