Junk Bond Ratings Surge

| May 30, 2018
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Since 2009, the level of global nonfinancial companies rated as speculative, or junk, has surged by 58%, to the highest level ever.

With 40% rated B1 or lower, the point that Moody’s considers “highly speculative,” as opposed to “non-investment grade speculative.”

In dollar terms, that translates to $3.7 trillion in total junk debt outstanding, $2 trillion of which is in the B1 or lower category.

When the economy slows, revenues will slow commensurately and put pressure in these highly speculative companies to find sources of capital to pay-off or refinance the wall of maturities coming at them.

 

Stay Tuned, Disciplined & Patient! {TJM}

The Investor & Character Equation (ICE) | S + R = O

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