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Europe Corporate Bonds Sink Amid Widespread Market Sell-Off

  • Markit Itraxx Europe debt risk gauge highest since June 2016
  • The worst is yet to come, ING credit strategist says
    
Photographer: Cyril Marcilhacy/Bloomberg

Europe’s corporate debt risk gauges soared on Friday afternoon as credit markets reacted to the slump in global stocks and the spike in bond prices.

The Markit iTraxx Europe Crossover index of credit-default swaps on high-yield companies rose 80.3 basis points to 384, its highest level since June 2016. The cost of insuring senior financial debt also rocketed, up 16 points in its biggest move in almost two years. Elsewhere, secondary prices for European leveraged loans fell to their lowest level since July 2016.