Risk Flipped as CCCs Beat AAAs Most Since 2009: Credit Markets
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Risk is being turned on its head in the corporate-bond market as debt deemed closest to default beats returns on the highest-rated debentures by the most in four years.
Securities ranked in the CCC tier or lower by Standard & Poor’s have gained 7.1 percent this year, compared with a 5 percent loss for AAA rated debt, according to Bank of America Merrill Lynch index data. AAAs are losing 1.2 percent this month, versus 0.5 percentage point for CCCs. The divergence is making this only the third year since at least 1996 in which the lowest-graded debt produced gains while top-rated bonds lost, the data show.