Credit Market Stress Deepens With Companies Racing to Raise Cash
- Boeing, Hilton plan to draw down loans as virus crimps travel
- U.S. high-grade spread widens to 2016 high before Trump speech
The stress in U.S. credit markets intensified on Wednesday, shutting primary issuance and driving sell-offs in the bonds of retailers and energy producers. Companies from Boeing Co. to Hilton Worldwide Holdings Inc. and Wynn Resorts Ltd. prepared to draw down billions of dollars in loans as they grapple with the impact of the coronavirus pandemic on cash flows.
Debt markets followed a tumble in global stocks with the investment-grade credit derivatives index more than 10 basis points wider and the high-yield CDX price plunging to its lowest since 2012. While the promise of action from the European Central Bank had restarted the region’s corporate bond market, issuance stalled again in the U.S. as investors reacted to updates on the virus and waited for news on the Trump administration’s promised stimulus package.