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Credit Ratings

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RMBS today: rising rate-linked income with capital preservation

Lenders use Residential Mortgage-Backed Securities to finance mortgages and RMBS are available to retail investors through fund structures. They come with many layers of protection beyond movements in house prices. 

Five lessons for bond investors from the Virgin collapse

The collapse of Virgin Australia not only hit shareholders, but their bond investors received between 9 and 13 cents in the $1. A widely-diversified portfolio can tolerate losses better than a concentrated one.

What should you look for when investing in private debt?

There are valid concerns about the coming pain among smaller companies but attractive risk-adjusted lending opportunities exist provided the right checks and precautions are taken.

Tony Togher on why cash isn’t just cash

An active manager of cash and fixed interest funds can achieve higher returns than the cash rate through a selection of other securities while managing both liquidity and income for clients.

BBB worries seen from beyond the headlines

Bond markets are far larger than stockmarkets, and the BBB segments in the largest of all in the corporate market. Many analysts have pointed to potential weaknesses but it pays to look a bit deeper.

Defaults low but no room for complacency

Many retail investors have turned to unrated or high-yield corporate bonds in recent years, but conditions have been favourable. Watch for the once-a-decade spikes in default rates.

The dangers lurking for credit investors

Due to the growing risks to high yield or junk bonds, this is not the time to accept their tight spreads in the search for better returns. Investment grade bonds and dividend yields are likely to be more dependable.

Are opinions of rating agencies worthwhile?

The reputations of credit rating agencies took a hammering during the GFC, and while there are legitimate criticisms, they have an important role to play and are followed by most major investors.

Why would you invest in junk?

Sub-investment grade investments, or ‘junk bonds’, pay well but carry a higher risk of default. If the risk is managed properly, a broad portfolio of high yield securities can be a worthwhile investment option.

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2024/25 super thresholds – key changes and implications

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Five months on from cancer diagnosis

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  • 21 March 2024

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