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High yield bond market: features and risks of a growing market

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  • María del Rosario Martín Martín

Abstract

High yield bond markets are increasingly growing in the last years. Assets managers have turn to this market looking for higher yields in a low interest environment and encouraged by the low default rates and the existence of a more dynamic secondary market now than in the past. The question that arises, however, is if investors could not be addressing the high yield bonds risks rightly. The present document reviews the features and the recent evolution of this market, paying special attention to the elements that could prevent the development and consolidation of this market as a financing source for the economy.

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  • María del Rosario Martín Martín, 2015. "High yield bond market: features and risks of a growing market," CNMV Working Papers CNMV Working Papers no. 6, CNMV- Spanish Securities Markets Commission - Research and Statistics Department.
    • Handle: RePEc:cnv:wpaper:dt_61en
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    1. Bessembinder, Hendrik & Maxwell, William & Venkataraman, Kumar, 2006. "Market transparency, liquidity externalities, and institutional trading costs in corporate bonds," Journal of Financial Economics, Elsevier, vol. 82(2), pages 251-288, November.
    2. Hendrik Bessembinder & William Maxwell, 2008. "Markets: Transparency and the Corporate Bond Market," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 217-234, Spring.
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