Corporate debt (including leveraged loans) -
November 13 - Reuters (Jason Lange): "U.S. corporate bonds are by far the most dangerous part of the bond market and more than half of triple-B-rated debt would have a below-investment-grade rating based on leverage alone, Jeffrey Gundlach, chief executive officer of DoubleLine Capital, warned… Gundlach said investment-grade corporates got to the most overvalued levels in the history of the U.S. bond market last September and have since been underperforming the broad bond market against the rising-rate environment… 'A lot of sectors look rich but the one that looks by far the worst - and is the worst - are corporate bonds,' said Gundlach… 'Ultimately, should a recession ever arrive, junk bonds will be particularly dangerous.'"
November 15 - Financial Times (Colby Smith): "The loan market for highly indebted companies has had a lot to celebrate this year. In May, the so-called leveraged loan market, which is typically tied to the three-month Libor rate (plus a spread relative to the respective risk), and therefore does well in rising rate environments, surpassed the $1tn mark in the US. Issuance, according to S&P Global Market Intelligence's LCD unit, is now on course to top last year's record high of $650bn. And in terms of returns, it's one of the best performing asset classes this year, outstripping high-yield bonds. Leveraged loans… have returned 4% this year, while high-yield bonds have returned less than 1%... But beneath the boom lies an unsettling reality: lending protections are bad, and may be getting worse. In fact, they're just about the weakest on record, according to a Moody's gauge…"
November 12 - Reuters (Alwyn Scott and Kate Duguid): "General Electric Co will sell assets with 'urgency' to reduce its high debt, Chief Executive Officer Larry Culp said…., as GE shares tumbled as much as 10% and the cost of insuring its debt hit a six-year high… 'We have no higher priority right now than bringing leverage levels down… We have plenty of opportunity to do that through asset sales.'"
