Goldman Says Riskiest Junk Bonds Are Most ‘Mispriced’ Since 2007
- Bonds rated CCC and lower trade at tightest spread since 2014
- Paltry payout for garden-variety risks; never mind recession
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The C-C-Craze for some of the riskiest corporate credits has gone too far, according to Goldman Sachs Group Inc.
While U.S. investment-grade bonds that are most sensitive to moves in borrowing costs have been hit hard this year, investors continue to pile into debt sold by some of the weakest junk-rated companies. Bonds in the CCC category -- just two notches above default -- have returned a whopping 330 basis points in total this year, according to Bloomberg index data.