Queen's Bank, Coutts, Warns on High Yield (HYG)

Like Hoare's Bank, Coutts & Co. is a survivor of the South Sea Bubble, John Law's Mississippi scheme and pretty much everything else that's happened since 1692.
From the Telegraph:

Coutts warns clients of threat from debt markets amid bubble fears

Coutts, the high-end private bank, has warned its clients against exposing their fortunes to a potential collapse of the high-yield debt market amid growing concerns of a new global credit bubble.

Senior managers at the private bank, whose customers include a who’s who of British society, are being discreetly advised to reduce their holdings of high-yield bonds, according to an internal warning seen by The Daily Telegraph.

Sales of high-yield debt have exploded this year as investors chase returns in an environment of historically low interest rates and rising inflation. In both Europe and Asia, high-yield sales have reached all-time highs. In January alone, Asian companies sold just over $9bn (£6bn) of high-yield bonds, a year-on-year increase of more than 6,000pc, according to data provider Dealogic.

Fears have been raised as investors increase the risk they are taking on the bonds by borrowing further. Coutts’ investment strategy committee has become concerned at the use by some wealthy individuals of borrowed money to enhance returns from high-yield investments and is understood to have begun advising clients to avoid the practice.

“If and when yields rise, the impact of these bonds, magnified with leverage, could lead to serious losses,” said one investment manager. 

 The use of borrowed money to enhance returns has become particularly prevalent in Asia, where local and international private banks have used guarantees of access to loans to win business. 

This practice has led to fears of a new bubble in high-yield debt as investors buy riskier bonds using more borrowed money.

Among the products causing most concern are CoCos – contingent convertible bonds – that either transform into ordinary shares or are wiped out when a bank’s capital levels fall below a given level....MORE

Back in 2009 the elder (by 20 years) Hoare's called for Coutts' owner RBS to be broken up:

 South Sea Bubble Survivor Says Dismantle RBS Along With Lloyds

Instead the British government bought the thing.