DoubleLine’s Baha Says Junk Bonds on ‘Overvalued Side’

Speculative-grade corporate bonds are on the “overvalued side,” according to Bonnie Baha, director of global developed credit at Los Angeles-based DoubleLine Capital LP, which manages about $50 billion.

Baha, who was speaking with Erik Schatzker on Bloomberg Television’s “Market Makers” today, said she likes bank loans and emerging-market corporate bonds.

Speculative-grade bond yields in the U.S. fell to a record-low 5.78 percent yesterday, according to the Bank of America Merrill Lynch U.S. High Yield Index.

The average price of the S&P/LSTA 100 index, which tracks the largest first-lien loans, climbed to 98.82 cents on the dollar yesterday, the most since Jan. 24. That’s close to a seven-year high of 98.9 cents reached earlier this year.

High-yield, high-risk debt is rated below Baa3 by Moody’s Investors Service and lower than BBB- at Standard & Poor’s.

To contact the reporter on this story: Matt Robinson in New York at mrobinson55@bloomberg.net

To contact the editors responsible for this story: Shannon D. Harrington at sharrington6@bloomberg.net John Parry, Chapin Wright

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.