Bloomberg.com: High-Grade Bonds After M&A Can Be Good Trade

Bank of America strategists suggest that purchasing investment-grade bonds issued by companies financing acquisitions presents a potentially profitable opportunity. In a recent research note, strategists, including Yuri Seliger, highlighted the tendency for credit spreads on these bonds to compress over time. This spread tightening typically occurs as companies prioritize debt reduction following an acquisition, a favorable development for bondholders. The strategists emphasized the current market's suitability for this investment strategy, citing the robust pipeline of announced mergers and acquisitions impacting investment-grade companies, reaching levels not seen since 2019.