And in addition, the Fed has raised rates four times since December 2016 and will likely raise rates three or four times this year, and more next year. So CVS tried to get its bonds sold before all this hits the fan. Because bond buyers – mostly institutional investors, such as bond funds and pension funds – are still in denial. They’re still chasing yield, especially those speculating on the riskiest corporate bonds.
In other words, since mid-December 2016, the Fed has hiked rates four times, in total by 1 percentage point, but over the same period, junk bond yields rated CCC or below have declined 1.5 percentage points as the bonds have rallied.