Key Takeaways: Caution is warranted entering 2023, however volatility could present intriguing buying opportunities • Although headwinds persist, the solid fundamental starting point should help most companies weather a slowdown and result in a persistently low default rate • Spreads could widen if a recession becomes more imminent. However, elevated yields and discounted bond prices look attractive and we believe high yield could surprise to the upside and generate coupon-plus returns.
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