This paper examines the U.S. commercial mortgage loan (CML) market and U.S. insurers��� investments in CMLs.
In this paper, we assess the potential risks associated with such a strategy by stressing capital requirements using spread-implied ratings.
Markets, economy, stocks, growth, global, fixed income, international, asset classes
Reaching for yield, which we define as buying bonds with wider spreads after controlling for sector and rating impacts, is a topic that frequently arises in the life insurance industry.
On June 20-21, we attended the 2019 IFRS conference in London to stay informed on important regulatory issues affecting the insurance industry today.
Since the financial crisis, for a relatively liquid investment CLOs consistently have had the highest spreads net of capital costs for US life insurers.
Investors are concerned about the deterioration of corporate debt quality, marked by lower credit ratings and a large share of covenant-lite issuance in the loan market.
Measuring book yield correctly
Implications for passive bond allocations
The arrival of the bond bear market, continued normalizing of monetary policy and need to finance expanding U.S. budget deficits, long-term rates are set to rise.