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‘Stuff Happens’: Nasty Reminder for Bondholders as ECB Eyes Exit

  • Bridge disaster and Bayer court loss revive company-risk focus
  • Looming end of ECB purchase has spurred bond-spread divergence
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Making the Case for an ECB Rate Hike in 2019

Europe bondholders are paying much closer attention to corporate borrowers as the central bank prepares to pull away a safety net that’s aided steady marketwide gains for years.

The Italian bridge collapse, a Bayer AG court loss and Turkish turmoil have all whacked individual companies’ bonds recently, fragmenting a market where huge European Central Bank buying meant notes almost moved in tandem. The greater concern about company-specific risks is also spurring investors to demand greater premiums on lower-rated notes.