U.S. Junk Bonds Enter Distress, Spreads Top 1,000 Basis Points
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Photographer: Michael Nagle/BloombergThis article is for subscribers only.
U.S. junk bonds entered distressed territory for the first time since the global financial crisis after spreads on the securities topped 1,000 basis points on Friday.
The average spread over Treasuries for bonds in the Bloomberg Barclays U.S. Corporate High-Yield index widened 37 basis points to 1,013 basis points, the highest since June 1, 2009, and a level that is typically associated with distress. The measure has surged from 550 basis points two weeks ago.