Clouds Build Over Junk Rally JPMorgan Says Has Topped Out

  • Several companies forced to scrap or alter terms on bond sales
  • JPMorgan Asset Management cuts high-yield bond holdings

A rally that sent yields on the world’s riskiest corporate bonds to a three-year low is showing signs of faltering.

string of companies including Virgin Media and Berry Global Group Inc. have had to scrap or alter terms on planned debt sales, the biggest exchange-traded fund tracking junk debt has suffered two consecutive months of outflows, and a gauge of high-yield energy bonds has plunged alongside last month’s drop in oil prices.

JPMorgan Chase & Co. and Seven Investment Management LLP are among those losing enthusiasm for an asset class that they say no longer offers enough reward for default probabilities amplified by the drop in oil and refinancing risk as central banks raise rates. JPMorgan Asset Management’s Absolute Return & Opportunistic Fixed-Income team has cut the share of junk debt in its $17 billion portfolio to about 40 percent from more than half…

Clouds Build Over Junk Rally JPMorgan Says Has Topped Out

Categories : Finance

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