Deutsche Bank to Bond Investors: Wake Up and Smell the Fundamentals
There's reason to be cautious about investment-grade corporate debt
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Pop quiz. Which corporate debt has performed better this year—the U.S. dollar-denominated bonds issued by Russian companies or investment-grade U.S. corporates?
If you answered Russian ones, well done. For all the talk of Russia's economic woes, it's actually the bonds issued by some of America's most creditworthy companies that have lost ground so far in 2015. In fact, as Bloomberg's Lisa Abramowicz reported on Wednesday, prices of U.S. investment-grade bonds have fallen 1.1 percent in the first two days of June alone. Why the (rather sudden) lack of love for what was once one of the hottest asset classes around?