00:00It's Benzinga bringing Wall Street to Main Street.
00:02U.S. credit markets are showing signs of overheating as investors pile into corporate debt despite
00:06historically low yields according to the Wall Street Journal. Analysts warn the valuations
00:10appear priced for perfection, leaving the market vulnerable to shocks. The concern is intensified
00:15after sudden bankruptcies in subprime auto lender Tricor Holdings and auto parts supplier First
00:19Brands, which rattled bondholders. While analysts note both cases had unique circumstances,
00:24rising defaults in private credit and persistent inflation are heightening unease. Wall Street
00:29fears that soaring corporate debt valuations are masking risks and offering investors too
00:33little compensation. Investment grade bond spreads fell at a 0.74 percentage point in September,
00:39the lowest since 1998, while junk bond spreads are near record lows at about 2.75 percentage points.
00:45For all things money, visit Benzinga.com.
Comments