Junk Bucks Slump With Tightest Spread Since ‘08: Credit Markets

Junk bonds are becoming a haven for fixed-income investors roiled by mounting losses in government, investment-grade corporate and municipal debt.

Gains of 0.8 percent this month on high-yield, high-risk bonds compare with losses of 1.9 percent for Treasuries, 1.5 percent on high-grade company notes and 1.4 percent on state and local debt, according to Bank of America Merrill Lynch index data. Relative yields on junk bonds versus higher-rated corporates narrowed to 388 basis points, or 3.88 percentage points, a level that hasn’t been breached in three years.