Junk Bonds Are Dominating Even One of America’s Safe Havens
- High-yield muni returns beat broad market by most since 2014
- Drives yields to lowest on record, quickens pace of new deals
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The municipal junk-bond boom is roaring back.
With the economy rebounding swiftly from the pandemic, interest rates on high-yield state and local government securities have tumbled to the lowest in over two decades. Cash is pouring into mutual funds focused on the junk-rated debt so quickly that money managers are fighting to get in on new deals. And prices have rallied, driving high-yield bonds to their biggest run of outperformance since 2014.