Bond Report
Development of European high yield bonds
The financial crisis also dominated the high-yield bond market. In the first three months of 2008 corporate bonds suffered significant spread increases to risk-free investment alternatives. The second quarter saw a temporary recovery in the high-yield bond markets and the relevant spreads. However, the continuing financial crisis led to significant increases in risk premiums on corporate bonds in the third quarter of 2008.
Corporate bond
The price of Logwin AG's corporate bond initially declined in the first three months of the year. However, at the beginning of April the price started to climb steadily and reached 98, its highest level so far, at the end of May. In the further course of the year the price declined due to the general situation on the financial markets and closed at 79 on September 30, 2008. The risk premium to a secure alternative (credit spread) rose significantly in the third quarter of 2008 in line with the general market trend. The credit spread was 1,200 base points at the end of the reporting period, following an initial 552 base points at the start of the year.