OECD warns of corp bond fire sale

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By Phil Thornton
21 Nov 2019

A slump in revenue growth during an economic downturn could trigger a change in investors’ risk appetite and a “widespread” sell-off of corporate bonds, the Organisation for Economic Cooperation and Development warned on Thursday.

The strong appetite for low-rated debt by investors searching for higher yields has created a specific vulnerability because these loans depend on a continuous stream of revenue to meet the coupon payments.

In its keynote annual economic outlook, the OECD said that corporate debt in the US appears ...

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