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What the Heck is Happening to Junk Bonds?
Friday, July 1, 2016 22:07
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wolfstreet.com / by Wolf Richter /
Honeymoon already over? Bad breath of reality next?
If you bought the crappiest bonds on February 10, you’ve made a killing unless the company defaulted, in which case you got killed, and a lot of companies defaulted. But so much money poured into junk bonds that prices soared and yields plunged even for the riskiest near-default issues.
At the riskiest end, junk bonds rated CCC and lower, with D being default, the average yield, as per BofA Merrill Lynch High Yield index, plunged from over 21% on February 10 to 15% at the close yesterday. And bond prices skyrocketed. The BofA Merrill Lynch total return index for CCC and lower rated bonds soared 30% over the period:
The post What the Heck is Happening to Junk Bonds? appeared first on Silver For The People.
Source: http://silveristhenew.com/2016/07/01/what-the-heck-is-happening-to-junk-bonds/
