04-09-2020, 10:24 AM
So, now rumors that the Fed will buy up junk bonds:
https://www.marketwatch.com/story/fed-ma...2020-04-08
There has already been a huge increase in "fallen angels" (former investment grade dropping to junk on credit downgrades), and the spread between the Fed's 0% rates for its Primary Dealers and what banks are willing to lend to businesses is huge (reports that Tilman Fertitta is seeking financing at 15% to save his casino/restaurant empire, which is admittedly one of the riskiest lending sectors right now).
Should be real interesting once significant percentages of former investment grade and newly minted junk go into default.
https://www.marketwatch.com/story/fed-ma...2020-04-08
There has already been a huge increase in "fallen angels" (former investment grade dropping to junk on credit downgrades), and the spread between the Fed's 0% rates for its Primary Dealers and what banks are willing to lend to businesses is huge (reports that Tilman Fertitta is seeking financing at 15% to save his casino/restaurant empire, which is admittedly one of the riskiest lending sectors right now).
Should be real interesting once significant percentages of former investment grade and newly minted junk go into default.