Examine the high yield market for a clear understanding of this evolving asset classHigh Yield Debt is the one-stop resource for wealth advisors seeking an in-depth understanding of this misunderstood asset class. The high yield market provides a diverse opportunity set, including fixed and floating rate debt, high and low quality debt issues and both short- and long-term duration; but many fail to understand that not all high yield exposure is the same, and that different market segments and strategies work best at different points in the economic cycle. This guide addresses the confusion surrounding high yield debt. You'll find the information you need to decide whether or not to buy in to a high yield fund, and how to evaluate the opportunities and risks without getting lost in the jargon.The U.S. corporate high yield market is worth $2.4 trillion--more than the stock markets of most developed countries. Market growth has increased the number of funds with high yield exposure, as well as the types of debt products available for investment. This book breaks it down into concrete terms, providing the answers advisors need to effectively evaluate the opportunities on offer.* Understand the high yield asset class* Learn the debt structures, performance and defaults* Evaluate risk and investment opportunities* Penetrate the jargon to make sense of high yield investmentOver 300 publicly traded funds provide exposure to U.S. high yield, but despite it's size and ubiquity, understanding of the asset class as a whole remains somewhat of a rarity--even among participants. A lack of transparency is partially to blame, but the market's evolution over the past fifteen years is the larger issue. High Yield Debt explains the modern high yield market in real terms, providing a much-needed resource for the savvy investor."Rajay Bagaria has written the first book that captures a 360 degree view of the high yield debt market. Whether you are an investor, investment banker, corporate lawyer, CFO or layperson simply trying to gain insights into the fundamentals of high yield debt, this book translates financial and legal concepts, trends and structures of high yield bonds and leveraged loans into a simple, understandable format. Mr. Bagaria's book is a valuable resource for anyone involved in the new issue or secondary leveraged finance markets."Frank J. Lopez, Co-Head Global Capital Markets, Proskauer"Bagaria does a great service for both high yield professionals and beginners by providing an accessible, well-written, insightful market primer."Steven Miller, Managing Director, S&P Capital IQ, Leveraged Commentary & Data"High-Yield Debt - An Insider's Guide to the Marketplace is a comprehensive book that provides an in-depth understanding of the history, growth, basics and details of high-debt and the high-yield market. The author gives insights that only an experienced professional can provide. The book will be invaluable to readers both starting out and knowledgeable about an important segment of corporate finance, dealing with concepts, structures and performance."Arthur Kaufman, Retired Partner, Fried, Frank, Harris, Shriver & Jacobson LLP / Member of Adjunct Faculty, Columbia Law School

Preface xiAcknowledgments xviiAbout the Author xixForeword xxiCHAPTER 1 Development of the High Yield Industry 11.1 What is High Yield Debt? 11.2 The Importance of Credit Ratings 31.3 The Origins of High Yield 51.4 Advent of the Leveraged Buyout 71.5 Junk Bonds 91.6 Market Maturation and Growth 111.7 High Yield Today 131.8 Summary 14CHAPTER 2 High Yield Issuers 172.1 High Yield Issuers 172.2 Capital Structure Considerations 212.3 Choosing Between High Yield Bonds and Leveraged Loans 222.4 High Yield Issuers by Industry 252.5 Purpose of High Yield Debt 252.6 The Role of Investment Banks 282.7 The High Yield Capital Raising Process 302.8 Summary 32CHAPTER 3 Buying High Yield Debt 333.1 Who Can Buy High Yield Bonds? 333.2 Who Can Buy Leveraged Loans? 353.3 Buyers of High Yield Debt 353.4 Investment Mandates Impact Volatility 373.5 Collateralized Loan Obligations (CLOs) 383.6 Implications of an OTC Market 423.7 Tracking High Yield Liquidity 443.8 Total Return Swaps and Margin Finance 453.9 Summary 48CHAPTER 4 High Yield Financial Concepts 494.1 Key Economic Terms of High Yield Debt 494.2 High Yield Call Protection 504.3 Fixed Versus Floating Rate Debt 524.4 Bond Yields, the Risk-Free Rate, and Credit Spreads 544.5 More Advanced Yield and Spread Concepts 564.6 Common Issuer Metrics Tracked 584.7 Summary 61CHAPTER 5 Debt Structures 635.1 Ranking and Subordination 635.2 Operating and Holding Companies 665.3 Leveraged Loan Structures 685.4 High Yield Bond Structures 725.5 Payment-in-Kind Debt 755.6 AHYDO 755.7 Summary 76CHAPTER 6 Credit Agreements and Legal Considerations 776.1 Loan Credit Agreements and Bond Indentures 776.2 Roadmap to High Yield Documentation 796.3 Affirmative and Negative Covenants 816.4 Incurrence-Based Versus Maintenance Covenants 836.5 Covenant-Lite - What Does It Mean? 856.6 More Advanced Credit Agreement Provisions 866.7 Sacred Rights and Bankruptcy Resolution 916.8 Recent Legislation 936.9 Summary 95CHAPTER 7 High Yield Asset Class Performance 977.1 Total Returns, Volatility, and the Sharpe Ratio 977.2 Comparative Asset Class Performance 997.3 Annual Performance Variations 1007.4 High Yield Bond and Leveraged Loan Price Volatility 1017.5 Returns by Ratings 1037.6 Beta and Correlation Analysis 1047.7 Interest Rate Risk 1067.8 Defaults and Recoveries 1087.9 Summary 109CHAPTER 8 Assessing the Market Opportunity 1138.1 Sources of Market Information 1138.2 How to Evaluate High Yield Credit Spreads 1158.3 Putting Historical Credit Spreads into Context 1188.4 Tracking Issuer Fundamentals 1198.5 The Maturity Wall 1228.6 Monitoring Excessive Risk-Taking 1228.7 High Yield Supply and Demand 1248.8 Summary 126CHAPTER 9 1940 Act High Yield Investment Funds 1279.1 The Investment Company Act of 1940 1279.2 High Yield Mutual Funds 1289.3 High Yield ETFs 1329.4 High Yield Closed-End Funds 1359.5 Comparison of Closed-End and Open-End Fund Returns 1379.6 Business Development Companies 1389.7 Summary 141CHAPTER 10 Mezzanine Debt, Distressed Debt, and Credit Hedge Funds 14310.1 Private Investment Funds 14310.2 Mezzanine Debt Funds 14510.3 Distressed Debt Funds 14710.4 Credit Hedge Funds 14810.5 Summary 150Glossary 153Index 169