Narrow Credit Spreads Make USHY A Hold (Rating Downgrade)

Conditions in fixed-income markets are in constant flux, although specifics vary for the different types of bonds in these markets. For high-yield corporate bonds, three trends seem to be of particular importance: below-average credit spreads, declining default rates, and continued outperformance. In my opinion, credit spreads are simply nearing historical lows, implying weak risk-adjusted income and returns for USHY. There are risks too, if the economy worsens.