While macro expectations support the case for credit spreads to remain at historical lows for some time, a very favourable spread environment for issuers should push corporates to increase supply, either to fund upcoming maturities or to finance share buybacks. Those changes in capital structures could prove beneficial for equity investors, but creditors will face deteriorated balance sheets due to higher use of leverage and receive negative real returns in exchange.
Source: Bloomberg, Unigestion. Data as at 19 February 2021.
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