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Worst Quarter in Four Years Heralds Yet More Pain for Junk Bonds

  • Commodities contagion spreading to retail, media, telecom
  • `Structural problems' in the market `are long-term in nature'
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Junk-bond investors are closing the books on their worst quarter in four years. And there’s no sign the pain will end.

Investors who helped companies from Valeant Pharmaceuticals International Inc. to ChenierEnergy Inc. raise a record $1.7 trillion of new speculative-grade bonds in the past five years are now bracing for the end of the credit boom as debt-laden businesses grapple with lackluster earnings. For the first time in more than 20 years, U.S. speculative-grade bonds are set to post a fourth straight month of losses, Bank of America Merrill Lynch Indexes show.