-- The global pile of junk-rated corporate debt is on track to shrink for a second consecutive year, with appetite for the risky securities diminishing in a world where 10-year Treasuries pay about 4.5%.As central banks have hiked interest rates and refinancing has grown more expensive, at least some companies are looking to cut their debt loads. The high-yield market has shrunk by around 8% this year to $1.
Meanwhile, global junk bond yields have jumped in recent months, and even after declining in early November, are still well above August levels, Bloomberg index data show, nearing the highest level since early June. Bank finance is also harder to secure and the leveraged loan market remains gummed up, limiting alternative options.
A Blackstone Inc. and Permira-led consortium are aiming for private credit financing for their potential buyout of Adevinta due to the weak state of the European leveraged loan market. Ford tapped the investment-grade bond market shortly after, as the market thawed following the Federal Reserve’s decision to hold rates steady.