Three Low-Rated Bonds for Investors: CIO

In a low interest rate environment, some of the lowest rated bonds are offering "good risk reward," Jeff Peskind, founder and CIO of Phoenix Investment Adviser, told CNBC Thursday.

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"The higher-quality bonds might be where you have the least amount of return [due in part to credit risk]," Peskind said. When interest rates increase, "those bonds go down the most and high yield bonds are the least sensitive to a backup in interest rates."

For that reason, he recommends the following three CCC-rated bonds because they tend to trade more like equities.

Rite Aid: Despite the liquidity issue in 2008 that dragged down its bonds, the third largest pharmacy retail chain has "shown signs of rebounding," Peskind explained.

RAD has been fairly successful at refinancing upcoming maturities and currently boasts roughly $26 billion in sales, and over $1 billion worth of liquidity. Rite Aid is currently yielding 9.25 percent.

ATP Oil and Gas: ATPG currently yields 11.875 percent and the firm's asset coverage is worth more than 100 cents on the dollar. The company has adequate near-term liquidity, with a cushion of $800 million, he said.

Clear Channel Communications: The company has a current yield of 13.5 percent and recently issued $750 million worth of longer-term bonds. Clear Channel is sitting on over $1 billion in cashflow.

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