The speculative-grade debt market, though, may have a hard time regaining lost ground ahead as credit risk comes back to the forefront. According to ratings agency Standard & Poor’s, more companies have defaulted globally so far this year than during the start of any year since 2009, reports Josie Cox for the Wall Street Journal.
The S&P’s findings mirror Moody’s expectations that corporate defaults could hit its highest rate since the financial crisis, led by the energy and mining sectors. More than 40 issuers of junk corporate debt have defaulted this year.
“Even more surprisingly, the strategy that worked best in a rising rate environment was to lower credit quality, Fridson found. In fact, return was inversely correlated with quality in both time periods,” reports Barron’s.
iShares B – Ca Rated Corporate Bond ETF
