DoubleLine's Gundlach Says Junk Issuance Likely to Collapse

  • Bond manager cites rising yields, slowing economic growth
  • He's warned that high-yield troubles show weakness in economy

Jeffrey Gundlach, the chief investment officer of DoubleLine Capital, said issuance of high-yield debt will probably collapse as yields have risen and the economy is slowing.

Problems in the junk-bond market, fueled by falling energy and commodity prices, peaked in December when a distressed debt fund run by Third Avenue Management gated redemptions. Gundlach, who spoke Monday at the Inside ETFs conference in Hollywood, Florida, has warned for more than a year that troubles in high-yield debt were an early sign of weakness in the economy.

U.S. high-yield issuance so far this month is down to nine deals totaling about $4.8 billion, compared with 32 deals totaling $22 billion for all of January 2015, according to Bloomberg data.

U.S. corporate junk bond issuance fell last year to its lowest since 2011.
U.S. corporate junk bond issuance fell last year to its lowest since 2011.
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