Spreads on U.S. high yield bonds, or
the premium companies pay over U.S. Treasuries, remain tight
despite a pick-up in distress within the asset class, as
investors see the majority of issuers. -May 02, 2024 at 03:27 pm EDT
- MarketScreener
US High Yield Spreads Still Tight Despite Pick-Up in Distress usnews.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from usnews.com Daily Mail and Mail on Sunday newspapers.
Spreads on U.S. high yield bonds, or the premium companies pay over U.S. Treasuries, remain tight despite a pick-up in distress within the asset class, as investors see the majority of issuers weathering higher-for-longer interest rates. Elevated rates and persistent inflation have eaten into the bottom lines of many U.S. corporate borrowers, particularly those with high leverage and lower credit ratings. The dollar volume of defaulted debt rose to over $33 billion in the first quarter from roughly $19 billion in the fourth quarter of 2023, according to a Monday report by Moody's Ratings.
Investors in U.S. corporate bonds are betting on resilience for the U.S. economy, despite the Federal Reserve indicating borrower costs could stay high in 2024.