Bear Stearns High Yield Index returns 10.93% for 2004, forecasts low single-digit returns for 2005

St. Louis, Jan. 3 - The Bear Stearns High Yield Index ended 2004 having seen returns of 10.93%.

In a report issued late Monday in conjunction with the index statistics, Bear Stearns high-yield analyst Mike Taylor and his team forecast low single-digit returns for 2005 (around 3%) and added that the forecast puts Bear Stearns "below the apparent consensus of around 7% returns."

Average spreads for 2004, meanwhile, ended the year at 329 basis points, 26 basis points wider than the historic low reached in October 1997, according to the report.

For the year, spreads tightened 136 basis points, while average yields tightened 70 basis points to a historic low of 6.9%.

As forecast by Bear Stearns, triple-C credits, which returned 15.7%, outperformed for the year.

Of the 11 industry sectors that comprise the index, basic materials outperformed all others on the year, finishing with a 5.56% yield to worst. Its chemicals component outperformed all other sub-sectors, ending with a 4.58% yield to worst.

The transportation sector underperformed all others, ending with an 11.13% yield to worst.

The index as a whole ended 2004 with a 6.88% yield to worst.

The index ended the year with 1,734 issues and a market value of $554.8 billion.

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