Global Investors Demand 6.4-Point Premium for CCC Debt as Stagflation Fears Deepen
Updated
Updated · Bloomberg · Jun 10
Global Investors Demand 6.4-Point Premium for CCC Debt as Stagflation Fears Deepen
2 articles · Updated · Bloomberg · Jun 10
Summary
6.4 percentage points of extra yield is now required to hold CCC-rated bonds over higher-quality junk debt, the widest premium in 14 months, signaling rising stress at the weakest corporate borrowers.
Middle East conflict fears are driving stagflation concerns that have soured sentiment toward risky credit, especially companies that loaded up on cheap debt during years of ultra-low rates.
Credit funds are bracing for heavier strain beyond public junk bonds, with higher-risk loans and private credit seen as vulnerable.
$2 trillion of debt tied to the leveraged-buyout boom is concentrated in those markets, widening concern that pressure on speculative borrowers could spread more broadly.