Junk bonds, CLOs, EM debt 'increasing risks for investors'
Emerging currency weakness also poses threat: BIS economist
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ECONOMISTS are expressing increasing concern over risks posed by rising corporate issuance of high yield junk bonds, collateralised loan obligations (CLOs) and emerging-market debt.
According to estimates of data from the Securities Industry and Financial Markets Association and JP Morgan, US corporations issued US$181 billion of junk bonds in the first half of 2014 compared to US$336 billion in the whole of 2013 and US$329 billion in 2012.
In Europe, high yield bond issues amounted to 44 billion euros (S$72 billion) compared to 75 billion euros in 2013. In Asia and other emerging markets, US$170 billion of corporate bonds were issued in the first half of this year against US$360 billion in 2013.
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