Concerns rising as valuations in high-yield market get stretched

London

ALARM bells have started to ring at the increasingly stretched valuations in the high-yield market, leading some investors to believe that the market could be set for a hard fall.

Spreads on US Double B rated bonds set a new post-crisis low of 231 bp this week amid strong demand from investors for higher yielding debt, while the European iTraxx crossover hit 254.9 bp on Friday, close to the post-crisis record low of 2014.