Massive BBB Corporate Sector Fixing To Loft A Host Of Fallen Angels

The junk bond to BBB-rated bond spread and the spread between AAA to BBB bonds shows amazing complacency. It won’t last……The lead chart shows what happens to “fallen angels” during recessions. All the investment grade bond funds have to dump the fallen angels straight into illiquid markets with few takers.  Half of the corporate bond universe is BBB-rated.