As Everyone Else Wins, Lowest-Rated Junk Bonds Get Hammered
- CCC spreads top 1,000 basis points for first time in 3 years
- Market skewed by troubled names like Frontier, energy sector
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The economy is humming and the stock market is hitting new highs, but a small corner of the high-yield bond market is going in the other direction -- amassing some big blow-ups.
Investors have been demanding significantly higher yields to lend to companies including McDermott International Inc., Frontier Communications Corp. and California Resources Corp. in recent weeks. So much so that spreads in an index of debt with the same or lower ratings -- the riskiest tier of junk, known as CCC -- just breached 1,000 basis points for the first time in more than three years.