FYI: Corporate-bond investors have been climbing the proverbial wall of worry, but in terms of yield. The extra increment paid by corporates over Treasury bonds to compensate for their credit risk—the so-called spread—has widened. And given the ineluctable math of bonds, higher yields translate into lower prices.
This scenario hasn’t been confined to names in the news, such as General Electric (ticker: GE) and PG&E (PCG), the big California utility facing losses from the state’s devastating fires. There’s also the deterioration of credit quality from the burgeoning of bonds with triple-B ratings, the lowest investment grade, barely higher than high-yield, or junk, territory. That includes some erstwhile gilt-edged credits such as those of AT&T (T), which will have to focus on paring its massive $185 billion debt load.
Regards,
Ted
https://www.barrons.com/articles/taxable-municipal-bonds-offer-safety-and-tempting-yields-1543593590?mod=hp_DAY_9
