HYT - HYT: 9.6% Yielding Credit CEF From BlackRock Not A Time To Buy

2024-06-26 05:45:29 ET

Summary

• This analysis discusses HYT, a closed-end fund from BlackRock that invests in high-yield bonds.
• HYT has performed well in a rising interest rate environment, outperforming some peers.
• Currently, HYT trades at a premium to its net asset value, near historic highs.
• The fund is heavily invested in "B" rated bonds, which are more susceptible to price declines if credit spreads widen.
• The fund uses some return of capital to maintain its distribution yield.

Thesis

We have not covered the BlackRock Corporate High Yield Fund ( HYT ) in more than a year. Thus, we feel it is time to re-visit this $1.4 billion AUM fixed income CEF from BlackRock. HYT is a name that we used to hold, having assigned it a 'Buy' rating in late 2022 on the back of a rights offering....

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