Bond-Market Tourists Threaten to Bolt With $200 Billion at Risk
- Equity, distressed investors bought corporate bonds in March
- They could be looking to take profits on the notes this year
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In March, investors that usually buy riskier assets ended up snatching up U.S. blue-chip company debt, taking advantage of bargain-basement prices. Now that the easy money has been made, they’re likely looking to sell.
The investors, informally known as tourists, may end up unloading as much as $200 billion of high-grade securities over the rest of this year, according to a Bank of America Corp. estimate. The selling pressure could be one of the few headwinds the debt faces in the coming months, said Hans Mikkelsen, the bank’s head of U.S. investment-grade corporate bond strategy.