High Yield – Basic Materials: Second

Returning to the No. 2 spot after a one-year absence is J.P. Morgan’s London-based quartet co-headed by Nitin Dias and Stephanie Renegar, who also captain teams that rank second in High-Yield and Investment-Grade Manufacturing/General Industrials and runner-up in Investment-Grade Basic Materials. The analysts track an ever-growing roster of some 90 bond issuers with “precise attention to detail,” as one portfolio manager puts it. In July the team recommended Rexam’s 6.75 percent 2067 hybrid notes as undervalued at 9,700p, on the British packager’s conservative financial policies and defensive business model, and advised simultaneously shorting its five-year credit default swaps, at 130 basis points, as a hedge against the risk of a leveraged buyout. Through mid-January the notes surged to 10,677p while the CDSs slipped to 98 basis points, and the pairs trade remains recommended. — Ben Mattlin