Fewer fallen angels as high yield universe shrinks to squeeze pricing

Fallen angel 230x140
By Victor Jimenez
20 Jul 2017

Fallen angels — corporate borrowers that lose their investment grade ratings — have become a key source of supply in global high yield bonds markets over the years. But there are signs that, particularly in Europe, such supply is ebbing away as corporate balance sheets improve. This is driving HY investors elsewhere to seek new credits.

Fallen angels represent a 22% market share of global high yield issuance, according to JP Morgan, up from 8% in 1999. But the debt stock of potential fallen angels — those borrowers to have lost IG ratings, or which are likely to, but which have yet to print a ...

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