BSJS - Junk Bond Default Surge Continues In 2024

2024-03-19 14:00:00 ET

Summary

• Corporate bond defaults were up massively in 2023, especially for high-risk junk debt, and the trend is continuing this year at a pace not seen since the 2008 global financial crisis.
• High-interest rates coupled with high inflation have made it a struggle for companies to make good on their commitments even as waves of new bond buyers continue to arrive, eager to lock in higher yields before rates go down.
• For now, with rate cuts on the horizon, interest remains strong in junk bond debt even as effective yields have fallen from their 2023 highs, and yield spreads remain relatively low.

By SchiffGold

Consumers aren’t the only ones defaulting on their debts : Corporate bond defaults were up massively in 2023, especially for high-risk junk debt, and the trend is continuing this year at a pace not seen since the 2008 global financial crisis. Unsurprisingly, companies selling low-rated junk debt are being hit the worst....

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