Back on the junk

摘要

In one of the most eye-popping episodes of the financial crisis, high-yield bonds-those rated "junk", or below investment grade-traded at an average interest rate of more than 20 percentage points above Treasury bonds in late 2008 as investors dumped risky assets. The junk-bond market's subsequent rebound has been nearly as dramatic. So much so that some reckon it is ripe for another fall. High-yield bonds returned a handsome 15% last year after a stunning 58% in 2009. The extra interest rate that investors demand to hold junk has fallen to its lowest since late 2007 (see chart).