Junk Bond Spreads Jump Most Since May on Europe Crisis Concern

Junk bond spreads in Europe jumped the most since May on concern the sovereign deficit crisis will make it harder for the riskiest companies to meet their obligations.

The extra yield investors demand to own speculative-grade bonds climbed 30 basis points yesterday to a three-month high of 658 basis points, or 6.58 percentage points, the biggest one-day increase since May 25, according to Barclays Capital’s Pan- European High-Yield Index. Spreads, which have widened eight days in a row, have surged 117 basis points since sinking to a more than 21-month low on Oct. 27.

High-yield, or junk, bonds are rated below Baa3 at Moody’s Investors Service and BBB- at Standard & Poor’s.

To contact the reporter on this story: Bryan Keogh in London at bkeogh4@bloomberg.net

To contact the editor responsible for this story: Paul Armstrong at Parmstrong10@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.