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"We Are In Uncharted Junk Terrain": Corporate Credit Quality Is Far Weaker Than In 2000 An

•, by Tyler Durden

Last week, the euphoria over US high yield bonds hit new post-crisis highs when amid a sharp slowdown in supply, a rise in the oil price and generally solid economic conditions, insatiable buyers of junk sent the Bloomberg Barclays Corporate high yield spread to the lowest since before the financial crisis, dropping as low as 303bps, the tightest level since late 2007 before drifting somewhat wider during the late week bond rout.

As US junk bonds have remained surprisingly resilient in the face of last week's rate rout, even as investment grade spreads have continued to drift wider resulting in a , questions have started to emerge about just how much longer this high yield complacency can sustain.

Addressing this issues, Michael Eisenband, co-head of corporate finance and restructuring at FTI Consulting, wrote that "we may be enjoying the longest bull market ever, but those skyrocketing security prices can't hide the fact that it's also "the junkiest bull market on record."

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