Convertible bonds - The road to recovery

Credit of the month

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David King
Putnam Investors

Stock and bond markets were choppy in the first quarter. Moreover the convertibles market reacted negatively when rating agencies cited GM for its deteriorating credit. The spread between high-yield and high-grade corporate bonds of comparable maturities widened significantly. Weak stock performance and widening credit spreads were detrimental to convertible bonds in the first half of the year.

Although convertibles experienced a correction, we did not believ

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