Credit Risks Are Rising as Demand Exceeds Supply, PineBridge Warns
- Lack of issuance may lead to bad underwriting decisions
- Junk bond and loan manager Jeremy Burton speaks in podcast
Soaring demand for a dwindling amount of junk-debt issuance is increasing the risk of credit market mishaps, says PineBridge Investments.
Investors keen to lock in historically high yields before interest rates fall have piled into debt from risky companies. While US corporates have steadily tapped bond and loan markets this year, they’ve done so mostly to refinance their obligations, leaving investors with less supply and more cash to buy debt.