Homebuilders Offer Weakest Junk-Bond Protection, Moody’s Says

  • ‘High-yield lite’ prevails at 70% in North American sector
  • Investors buy anyway, in part because land doesn’t depreciate

Junk bonds issued by homebuilders offer the weakest covenant protections of any non-financial sector in North America, but investors are buying anyway because land is viewed as such a strong underlying asset, Moody’s Investors Service said.

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