Guggenheim Q4 2017 High-Yield and Bank Loan Outlook: Identifying Industries Most Vulnerable to a Downturn as Credit Cycle Ages

NEW YORK, Oct. 17, 2017 -- Guggenheim Investments, the global asset management and investment advisory business of Guggenheim Partners, today provided its Fourth Quarter 2017 High-Yield and Bank Loan Outlook.

Among the highlights in the 12-page report:

• Improving fundamentals have driven spreads toward post-crisis tights, but history has shown how quickly this can turn.
• As high-yield spreads and yields approach historical lows, it is becoming increasingly important to avoid sectors and issuers that are unlikely to return full principal or satisfy interest payments for the life of the bond.
• Our research uncovered consistent differences between borrowers that defaulted in 2016 and 2017 and those that survived, as seen in metrics such as net debt/earnings, cash flow/interest expense, and balance sheet cash/interest expense. Early warning signs were evident as early as 2014.

Using the same approach, we highlight the industries that are in the weakest credit positions, making them particularly vulnerable to a cyclical decline in earnings and also sensitive to rising rates, namely retail, utilities, and media. For more information, please visit http://www.guggenheiminvestments.com.

About Guggenheim Investments
Guggenheim Investments is the global asset management and investment advisory division of Guggenheim Partners with more than $242 billion¹ in total assets across fixed income, equity, and alternative strategies. We focus on the return and risk needs of insurance companies, corporate and public pension funds, sovereign wealth funds, endowments and foundations, consultants, wealth managers, and high-net-worth investors. Our 275+ investment professionals perform rigorous research to understand market trends and identify undervalued opportunities in areas that are often complex and underfollowed. This approach to investment management has enabled us to deliver innovative strategies providing diversification opportunities and attractive long-term results.

¹Guggenheim Investments total asset figure is as of 08.31.2017. The assets include leverage of $11.6bn for assets under management and $0.4bn for assets for which we provide administrative services. Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Real Estate, LLC, GS GAMMA Advisors, LLC, Guggenheim Partners Europe Limited, and Guggenheim Partners India Management.

Investing involves risk. In general, the value of fixed-income securities fall when interest rates rise. High-yield securities present more liquidity and credit risk than investment grade bonds and may be subject to greater volatility. Investments in bank loans securities involve special types of risks, including credit risk, interest rate risk, liquidity risk and prepayment risk.

This information herein is distributed for informational purposes only and should not be considered as investing advice or a recommendation of any particular security, strategy or investment product. This material contains opinions of the author but not necessarily those of Guggenheim Partners or its subsidiaries. The author's opinions are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. ©2016, Guggenheim Partners, LLC.  No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Guggenheim Partners, LLC

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Ivy McLemore
Guggenheim Partners
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