Brexit Bond Trades Mean Sell What You Can in Illiquid Market
- Higher-rated junk debt leads selloff on easier trading
- Riskiest company bonds fail to change hands, prices indicate
Brexit Pushes Stoxx 600 to Largest Decline Since 2008
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Corporate-bond traders trying to navigate the fallout from Britain’s decision to leave the European Union collided with the reality of illiquid markets, leaving few bonds they could actually buy and sell.
A market rout was driven by higher-rated speculative-grade securities, which sold off because they’re easier to trade. By contrast, bond prices indicate that the riskiest company notes didn’t change hands.