Investors are concerned about the deterioration of corporate debt quality, marked by lower credit ratings and a large share of covenant-lite issuance in the loan market.
Credit is typically a non-recessionary asset class and should perform well so long as there is no impending recession, which at the moment looks unlikely.
Corporate bonds still add value in portfolios. But changes to the structure of the corporate bond market mean investors should have an understanding of any new risks.
Corporate debt as a share of gross domestic product has risen dramatically through the last decade, and with it, leverage has increased and credit quality declined. As a result, many investors are left wondering if credit markets coul…
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