FT.com / Capital Markets – Investors abandon junk bonds
Investors are selling out of “junk” bonds at the fastest since September 2005, in the latest indication that concerns over sovereign debt are spreading to other credit markets.
In the week that ended on Wednesday, nearly $1bn was withdrawn from US funds that hold high-yield corporate bonds (junk bonds), according to Lipper FMI – the largest outflow in almost four and a half years.
Whether the outflows signalled the end of the junk bond rally depended on whether the financial problems in Greece were resolved or spread, Mr Fridson said. ”If the problem persists or worsens, it would be bad news for every ’risky’ asset out there, including high-yield bonds.”
via FT.com / Capital Markets – Investors abandon junk bonds.