Coronavirus: Companies Tap Junk-Bond Market to Shore Up Cash

Policy

[ad_1]

Bloomberg:

Companies shoring up cash to survive the global pandemic raised funds in the U.S. high-yield market at the fastest monthly pace ever.

Junk issuers have already sold $46.7 billion of bonds in June, surpassing the prior monthly record of $46.4 billion in September 2013, according to data compiled by Bloomberg. [Tuesday’s] $500 million deal from Navios Logistics pushed the year-to-date volume to $199 billion, up about 66.5% on the same period a year ago, the data show.

Companies have rushed to build cash war chests to see them through the disruption amid the economic slump caused by the pandemic, which triggered a slew of bankruptcies. The Federal Reserve plans to purchase some types of high-yield bonds to boost liquidity spurred by record demand from investors….

Strong demand and low absolute borrowing costs encourage issuers to tap the high-yield market despite challenging economic data and renewed virus flare-ups. Risk sentiment has shifted toward an “optimistic recovery path,” according to Steven Oh, global head of credit and fixed-income at PineBridge Investments, which manages about $100 billion in assets.

From the issuers’ point of view, this makes sense, and it’s easy to understand why investors, desperate for yield in an era of yield-suppression, would pile in, but I wouldn’t lose sight of that nasty little phrase “challenging economic data,” three words in which there is no ‘V’.

[ad_2]

You Might Like

Read the Original Article Here

Articles You May Like

Boeing CEO to step down in broad management shake-up as 737 Max crisis weighs on aerospace giant
Student found dead in river two weeks after disappearance
California man arrested after using hidden camera to record over 90 victims in Starbucks restroom
Wayne Allyn Root with #1 Story in America: The Open Border Invasion of America. But WAR has a SOLUTION Until Trump is Elected in November. And His Solution will Drive Liberals into Fits of Rage & Insanity!
Conspiracies to compassion: How the tone in the US has changed after Kate’s cancer announcement

Leave a Reply

Your email address will not be published. Required fields are marked *