Below Par — Capital-Gain Kicker

Discounted USD coupon bonds (price ≤ 92) with a 2–7Y tenor and BB+ or better rating.

This month’s screen targets USDdenominated instruments trading at or below a cash price of 92 with tenors spanning the twotosevenyear window, isolating deeply discounted paper that offers a structural capitalgain kicker alongside primary income. By focusing on issues trading well below par, professional fixedincome allocators can capture significant price appreciation to par upon maturity or refinancing, augmenting overall portfolio total return in a shifting macroeconomic rate environment. Yields across the ten screened securities diverge sharply based on fundamental credit risk and sector dynamics, ranging from doubledigit returns up to extreme distressed levels that demand rigorous idiosyncratic credit selection. For instance, Brazilian basic materials names like CSNABZ offer yields to worst exceeding 21% near 50 cents on the dollar, while higherrated or more stable utility and technology credits such as AEGEBZ and CoreWeave (CRWV) cluster in the 13% to 15% YTW range with cash prices safely in the lowtomid 80s. The opportunity set spans highbeta emerging markets—predominantly Brazilian energy, utilities, and materials—alongside domestic US technology and consumer sectors, creating a diversified matrix for relativevalue positioning. While names like the 2030 paper from OB reflect severe credit distress carrying a YTW of over 40%, selective allocation across resilient industrial and utility profiles allows portfolios to balance asymmetric upside against manageable tail risk.

Results are limited to USD bonds with an amount outstanding of at least USD 200MM.