Junk-Bond Market Gets Riskier With Erosion in Credit Quality
- ‘Seismic changes’ that had boosted quality are now reversing
- Credit erosion, looming maturities portend higher default rate
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The $1.4 trillion US junk-bond market is getting junkier, as more debt gets either downgraded or elevated out of the high-yield universe altogether, leaving greater potential risks for investors.
Credit quality is starting to erode as pandemic-fueled “seismic changes” that altered the mix of the high-yield market are now reversing, according to Barclays Plc strategists.