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By Carl SELLS, Portfolio Manager, Active Fixed Income, LGIM
In the Global Financial Crisis the default rate neared 10%. There are two good reasons why we don’t expect 2023 to get close to that.
In his heyday, Michael Milken was known as the ‘King of Junk Bonds’. His sobriquet reflected the risky leverage characteristics of the nascent 1980s high yield (HY) bond market, and Milken’s position atop it. How times change. By 1990 the king had lost his crown, with Milken agreeing to a lifetime ban from any involvement in the securities industry.
Junk bonds ain’t what they used to be
HY bonds also aren’t what they once were. If Milken were running his emporium today, he’d likely be known instead...
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