BofA Sees Junk-Bond Train Wreck as Pain Spreads Across Market
- High-yield debt index set to fall for four consecutive months
- Debt loads, poor liquidity, weak economy said driving rout
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Junk-bond investors reeling from a brutal month of losses had better get ready for more pain.
What started out as weakness in commodities-related debt has quickly spread to other areas of the market, with lackluster earnings, heavily indebted companies, slow global growth and “appalling bond market liquidity” signaling the end of the credit boom, Bank of America Corp. analysts led by Michael Contopoulos wrote in a report Tuesday.