DDJ Capital Management Blog

In Part 1 of of our series on 144A bonds (144A Bonds and Why We Buy Them), we discussed what these securities are, their increased importance in the high yield market, and why DDJ believes investors seeking exposure to high yield should embrace investing in Rule 144A issuances.

In this edition, we discuss an important trend in the high yield bond market: the prevalence of 144A-for-life bond issuance (i.e., those issued without registration rights) relative to 144A high yield bonds issued with registration rights.

Interested in reading about privately placed 144A high yield bonds trading on the secondary market? Did you catch our popular audiocasts on topics such as the impact of fallen angels and the factors that led to negative oil prices? Below, check out our top-three blogs of 2020.

Are you exploring high yield? Watch these videos to learn more about the challenges and opportunities our Senior Research Analysts are seeing within their respective high yield sectors.  

During our DDJ Virtual Investment Conference held in October 2020, our analysts provided in-depth video updates on the high yield sectors they cover.

Interested in learning about the challenges and opportunities our senior research analysts are seeing within their respective high yield sectors? 

During our DDJ Virtual Investment Conference held in October 2020, our Senior Research Analysts provided in-depth video updates on the high yield sectors they cover. 

During DDJ's Virtual Investment Conference held in October 2020, Portfolio Manager and Director of Research Roman Rjanikov, discussed DDJ’s Environmental Sustainability High Yield Strategy that DDJ recently launched via a simulated portfolio¹.

In this video, Mr. Rjanikov also explains how DDJ has incorporated ESG analysis into its investment process.

“If one is concerned about valuations and the future performance and volatility of the equity markets, from a historical perspective, high yield appears cheap relative to equities at this point in the cycle.”
-David Breazzano

The following is a summary of an excerpt from our 2020 DDJ Virtual Investment Conference. To access the video featuring David Breazzano, DDJ’s President, Chief Investment Officer and Portfolio Manager, addressing this topic, please click here.

In order to better understand the current state of the high yield market and where we see opportunities, let’s first take a step back and look at it from a broader market perspective by comparing high yield to equities, with equities represented by the S&P 500 index. I believe it's important to make this comparison to better understand the relative value between the two asset classes. In addition, before we look at the current environment, it is informative to get a historical perspective, so let’s review the past two major inflection points and subsequent recoveries in those markets, with the first such inflection point occurring during the 2001 to 2004 period.

A few months ago, DDJ hosted a writing contest geared towards college students. Students were tasked with submitting a paper discussing the topic of board diversity and whether it has an impact on corporate performance.

This week we are featuring the work of our first place entrant, Saamia Bukhari. Ms. Bukhari presents key thoughts and arguments as to why diversity can empower a company’s board of directors, as long as such diversity is achieved successfully under the conditions of inclusivity and sincerity. Citing powerful research from various studies, the writer presents empirical evidence that diversity can positively affect a company’s bottom-line, as well as drive innovation from within. We invite you to read her full paper below.

When many investors hear terms like “default” or “bankruptcy”, negativity and losses probably come to mind, and for good reason. Over the past 25 years, on average, when a high yield bond has defaulted, investors lost almost 60 cents on every dollar invested.¹

“Rule 144A is therefore very valuable to issuers, as it reduced the cost of capital by improving the liquidity of the institutional secondary market for privately placed bonds.”
– Andrew Ross, CFA, Director, Portfolio Specialist

Not familiar with 144A bonds? You’re not alone. Given the growth of bonds issued via Rule 144A (“the Rule”) and their increased importance in the high yield market, we thought it would be informative to provide a brief overview of Rule 144A and the bonds issued under this rule.

Today we are very happy to announce the winners of the DDJ Capital Management White Paper Challenge. In this contest, college students were tasked with submitting a paper discussing the topic: “Does Board Diversity Impact Corporate Performance?” Of all the contestants, we have selected the following two winners.