Crowded-Out Bond Traders Gorge on Corporate Debt: Credit Markets
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Major central banks are buying up so much government debt that investors have little choice other than to funnel ever more of their money into riskier corporate debt.
Led by the European Central Bank and the Bank of Japan, policy makers will swallow up all of the net $1.2 trillion in government securities expected to be issued this year, according to JPMorgan Chase & Co. That means money managers may allocate 20 percent more than benchmark indexes to purchase company securities in 2015 compared with 5 percent more five years ago, according to the world’s biggest underwriter of the debt.