It surveyed 17 airlines for various kinds of tarmac delays, their menu and contracts of carriage and customer service commitments and issued grades for these separate factors and an overall grade.
Since March 2009, those factors have both been big tailwinds for below-investment grade paper, helping drive both the JNK and HYG 50% higher in price over the past year and a half.
The team thinks all of these factors present a catalyst for investors to enjoy the higher current income versus investment grade and potentially for the yield advantage to compress further leading to modest capital appreciation.
His model is based on factors such as changes in bank lending, the economic growth rate and the size of the speculative-grade market (a glut of issuance tends to be an indicator of loose lending practices).