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IFT Notes for Level I CFA® Program
IFT Notes for Level I CFA® Program

R55 Fundamentals of Credit Analysis

7. Special Considerations of High Yield, Sovereign, and Non-Sovereign Credit Analysis


What is important from a credit analyst and an investor’s perspective when investing in corporate bonds: to choose high-quality, investment grade bonds. Can the same credit analysis principles we have seen so far be applied to evaluate other credit risky bonds as well? Yes, to an extent, but there are differences. We look at three market segments: high-yield corporate bonds, sovereign bonds, and municipal bonds.