Risk of Corporate Debt Fire Sale?

The Bank for International Settlements continues to sound the alarm surrounding corporate debt. Per an article in the FT, “mutual funds that invest in investment-grade debt have increased their share of triple B bonds to about 45 percent of portfolios in the US and Europe, from 20 percent in 2010.” Triple B debt is the lowest rating that qualifies for investment grade. The concern is that if enough issuers were abruptly downgraded it would create a corporate debt fire sale.

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Source: Joe Rennison | "BIS sounds alarm on corporate debt pile-up" | The Financial Times | 03/05/2019 | Visit