HYB - HYB: High Yield Panic Mode Is A Buy Signal

• HYB is a high yield focused CEF with low leverage (sub 30%).
• The fund is getting pummeled as the market sells off with all participants in risk-off mode.
• Bid/ask spreads are yet again widening out to panic levels while short dated HY bonds are trading with yields of 7%+ while fundamentals are actually improving for certain companies.
• Market implied probabilities of defaults are pricing in a severe recession while we are of the view that the Fed will cause a mild one.
• Corporate balance sheets are now in great shape but the HY CDS index is now close to its March 2020 panic levels.

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