A $1 trillion powder keg threatens the corporate bond market
“The worry now is that, with so many of those BBB ratings dependent on the ability of companies to deliver on their debt-cutting promises, any hiccup in the economy or exodus of investor cash will lead to a surge of downgrades to junk. That could lift companies’ borrowing costs substantially, adding new strains to those companies. And if it were to happen en masse, it could overwhelm the $1.3 trillion U.S. speculative-grade debt market and potentially cause the weakest borrowers to lose access to capital.”
USAGOLD note: Is the corporate bond market the next sub-prime crisis? As if the markets needs something else to worry about. . . . This article is highly recommended for those who like to stay ahead of the curve.