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Snowed under by a blizzard of junk bonds

Record amounts of paper, not many people to assess it. FN looks at whether these high-yield products are getting the scrutiny they need

Snowed under by a blizzard of junk bonds
Photo: iStock

Junk bonds are being issued at a record rate. But this poses a challenge for the banks, asset managers and rating agencies that need to analyse these issues and, in some cases, decide whether to invest.

The problem was highlighted in a note in July by Matthew Mish, head of credit strategy at UBS in New York, which said that while the market had grown significantly, many of those who need to analyse the bonds had not developed their research capacity.

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