1 year ago

Gundlach and Others Voice Concerns Over Corporate Debt Market

Gundlach and Others Voice Concerns Over Corporate Debt Market
Gundlach Is Latest to Sound Corporate Debt Alarms: Credit Weekly · livemint.com

Some financial experts are worried about the amount of debt that companies have.

They think that these companies might not be able to pay back all of their debts if things get tough, like if prices go up or if there are problems in the world.

One expert, Jeffrey Gundlach, is selling off risky bonds because he thinks they're not worth the risk right now.

Even though many people are still buying company debt, some signs suggest that things could become risky, like some companies being downgraded in their credit ratings.

It's like when your parents might get their credit score lowered if they miss payments on their credit card.

Basically, some experts are advising caution because they think there's a chance the market might not be doing well.

Key facts

High-yield spreads
Around 3 percentage points
Two-decade average spread
4.9 percentage points
Debt downgraded vs. upgraded
More downgraded than upgraded in the last month.
Fallen angel example
Warner Bros. Discovery Inc.

Sources

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