Almost $1.6 trillion of junk bonds globally will default between 2016 and 2020, according to Martin Fridson, chief executive officer of New York-based FridsonVision LLC, a research firm specializing in speculative-grade debt.
Investors in junk bonds will lose a yield cushion of more than 1.5 percentage points as the Federal Reserve winds down its unprecedented quantitative easing program that’s bolstered credit markets for five years, according to Martin Fridson.
Hedge funds have amassed the greatest share of the $1.2 trillion U.S. junk-bond market since the credit crisis, raising concern bets with borrowed cash will accelerate losses when the Federal Reserve stops printing record amounts of money.
Speculative-grade debt offers an attractive buying opportunity for investors as relative yields on the securities are elevated, according to Martin Fridson, global credit strategist at BNP Paribas Investment Partners.
Dave & Buster’s Inc. , the closely held operator of restaurant-entertainment complexes, is planning to sell debt as investors accelerate withdrawals from mutual funds specializing in high-yield, high-risk bonds.
Corporate debt is “fairly valued” even as the Federal Reserve is poised to hold down interest rates for too long, stoking higher inflation and hurting savers, according to Martin Fridson, global credit strategist at BNP Paribas Investment Partners.
Yields on speculative-grade bonds are justified by expectations for the economy and the ability of companies to meet their debt obligations, according to BNP Paribas Asset Management’s Martin Fridson .