Signs of ‘Pure Froth’ Emerging in Credit Markets, Cantor Says
- U.S. high-yield market is having busiest week in two years
- Junk bond outperformance unlikely to last: Cantor’s Cecchini
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Warning signs are starting to flash in U.S. credit markets, according to Cantor Fitzgerald LP.
Companies sold around $13 billion of junk bonds this week, the most in more than two years, according to data compiled by Bloomberg. Risk premiums for the securities have dropped more than 1.5 percentage points this year on average, and investors aren’t getting paid much more to buy junk bonds instead of investment-grade, by some measures.