Economics
Distressed Bonds at 59 Cents Threaten Emerging Market Gains
- Global high-yield bonds set for first yearly loss since 2008
- Corporate defaults at highest since credit crisis, S&P says
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Investors may struggle to profit from bonds of distressed companies in developing nations this year after a plunge last quarter, teamed with an increasingly uncertain outlook, looks set to erase 2015’s gains.
The securities tumbled 13.4 percent in the three months to Sept. 30, paring annual returns to 0.95 percent, a Bank of America Merrill Lynch index shows. The market value of the gauge’s 156 notes has dropped by almost 30 percent since Dec. 31 to $54 billion, or about 58.8 cents on the dollar. Global high-yield bonds fell 4.51 percent in the third quarter, bringing year-to-date losses to 1.4 percent. They’re on track for their first negative return since 2008.