Quality Corporate Bonds Become Deeply Discounted amid Rising Rates, Offering Investors Attractive Income Opportunity

Almost 1,500 high-grade corporate bonds from major companies are trading at steep discounts of 50-80% below face value. This presents an opportunity for investors to buy quality bonds cheaply.
Companies like Apple, Microsoft, Google, Disney, and Comcast have issued bonds in recent years when rates were low that are now discounted.
With interest rates rising, bond prices have fallen based on the inverse relationship between rates and prices. But the bonds still offer attractive yields.
Investors can buy individual bonds through brokers or gain exposure through bond mutual funds and ETFs.
Long-dated bonds maturing in 10+ years from strong companies offer income potential and limited credit risk if held to maturity.

marketwatch.com

Relevant topic timeline:

8/22/2023

Banks Loading Up on Cash Fuel a Record $2 Trillion Bond Spree

Global financial companies have sold $2 trillion worth of bonds in a record amount of time this year, with European lenders paying off central bank loans and Chinese firms strengthening their balance sheets amidst economic uncertainty.

9/20/2023

High-Yield Bond Rally Signals Bullish Outlook for Stocks

High-yield bonds outperforming relative to corporate bonds suggests a risk-on environment for stocks, according to a bullish signal in the bond market.

9/30/2023

Municipal Bond Funds Hit by Spiking Yields and Inflation Fears, Creating Buying Opportunities for Investors

Closed-end municipal bond funds are currently trading at the largest discounts to their asset value in the past 18 years due to recent fixed-income market selloffs.

10/6/2023

Bank of America Forecasts Slight Increase in Municipal Bond Sales in 2024 Despite Higher Rates

Bank of America is forecasting that $400 billion of state and local bonds will be sold next year, which is slightly higher than this year's sales.

10/5/2023

Rising U.S. Debt Spooks Bond Investors, Drives Treasury Yields Higher

Rising concerns over U.S. government spending and the budget deficit have led to a sell-off in Treasury bonds, pushing prices to 17-year lows as bond vigilantes punish profligate governments by selling their bonds.

10/18/2023

Bank of America Issues High-Yield Corporate Debt Despite Deposit Declines

Bank of America is issuing a 10-year corporate bond with a 6.55% coupon rate, offering a higher interest rate than other banks and surpassing the rates of certificate of deposits on the open market.

10/27/2023

Looking for Stable Returns? How to Buy Treasurys Offering 5% Yields

Investors are turning to US Treasury bonds with yields near 5%, the highest since 2007, for healthy, low-risk returns as the stock market remains volatile.

Topics

Posted 9/27/2023, 6:33:00 PM