It’s Not Just Toys ‘R’ Us. More Credit Weak Spots Emerge
- Face-value of junk debt trading at distressed prices rises
- Credit markets in late-cycle stage, get defensive: MS Says
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Beneath the tranquil surface of U.S. credit markets, bearish winds are blowing. Issuer and sector-specific risks are increasing while the pile of debt trading at distressed levels is rising -- evidence the post-crisis debt bull-run is peaking.
That’s the alarm sounded by Wall Street arch-bears Morgan Stanley after a deep dive into the shifting credit landscape in recent months, which they reckon vindicates a long-standing call that junk premiums aren’t compensating investors for the risks.