Junk’s Best Rally Since March Entices Borrowers: Credit Markets
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High-yield, high-risk bonds are rallying the most in four months on speculation defaults among the neediest borrowers will diminish as profits exceed forecasts.
Returns of 2.99 percent this month are prompting a surge in U.S. speculative-grade offerings with Advanced Micro Devices Inc., the second-largest maker of microprocessors, and Vantage Drilling Co. leading $12.5 billion of July issuance, according to data compiled by Bloomberg. Junk bonds returned 1.3 percent last month after losing 3.52 percent in May, Bank of America Merrill Lynch index data show.