US Credit Markets Dry Up

US credit markets are grinding to a halt with fund managers refusing to bankroll buyouts and investors shunning high-yield bond sales as rising interest rates and market volatility weigh on sentiment.

Not a single company has borrowed money through the $1.2tn US high-yield corporate bond market this month. If that drought persists, it would be the first month since November 2008 that not a single high-yield bond priced in the market, according to data providers Informa and Dealogic.

Yields on junk bonds have climbed by more than 100 basis points since the middle of September, when equity markets set an all-time high, data from ICE BofAML Indices showed.

Reference

Financial Times, Eric Platt, Colby Smith & Joe Rennison, 2018-12-17, “US Credit Markets Dry Up as Volatility Rattles Investors”