The modern high-yield bond market which began a quarter of a century ago is the offspring of a successful, if sometimes rocky, marriage. Mutual funds seeking maximum income hooked up with basic-industry companies fleeing from the restrictive covenants imposed by private lenders. As a rule, fixed coupons were a trait of this product.
Floating-rate instruments traditionally held little appeal for investors that had no specific, interest rate-sensitive liabilities to match. The upward-sloping yiel