Investing in energy with fixed-income securities

Capital gains and attractive yields for industrious investors

Fixed-income instruments are often associated with a low risk-reward ratio. Today’s pick is different. The bond trades at a 25% discount on par while coming with an 8.75% coupon. If we consider the best case vs. moderately bad scenario (company dissolution and 50% debt haircut), we get risk reward 2.0. This figure is not typical for fixed-income instruments.