Junk Debt Spreads at Lowest Since Before Recession
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Investors are accepting the lowest relative yields on speculative-grade debt in more than three years as new issues from borrowers such as Charter Communications Inc. rally amid signs the economy is improving.
Spreads on junk bonds declined 5 basis points yesterday to 527 basis points, or 5.27 percentage points, Bank of America Merrill Lynch index data show. St. Louis-based Charter’s $1.1 billion of 7 percent, 8-year notes issued yesterday rose 0.63 cent to 99.88 cents on the dollar as of 1:48 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.