A $1 trillion powder keg threatens the corporate bond market

Bloomberg/Molly Smith and Christopher Cannon/10-11-2018

“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.

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