Pacific Investment Management Co.: The past three weeks have marked the biggest collective souring on high-yield bonds since last June, bringing an abrupt halt to the 10.4 percent return over the previous 10 months. Even short-term junk-rated notes -- typically more immune to such swings in sentiment -- have suffered, with investors yanking the most money ever from a Pacific Investment Management Co. exchange-traded fund HYS:US focused on such debt, according to Business Week. The market reaction highlights what our credit investors considered the number one concern in our recent survey - namely, geopolitical risk, wrote BAC:US Bank of America Corp. BAC:US strategists led by Hans Mikkelsen in a July 17 report and Bond buyers are sending a loud message this month: They want a break from the riskiest securities. Its hard for bond buyers to stomach extra risk in the face of escalating conflicts in Gaza and Ukraine, especially when they re getting about the lowest compensation ever to own speculative-grade debt. Borrowing costs are now starting to rise for the least-creditworthy U.S. companies amid the violence in some of the worlds more volatile regions, underscoring just how intertwined the global economy has become.
(news.financializer.com). As
reported in the news.
Tagged under , topics.