Sprint Corp. is paying above-market interest rates on new notes to become the leading issuer of U.S. junk bonds this year as it seeks to fund an expansion of the country’s third-largest wireless network.
Corporate-bond buyers are accepting the lowest relative yields since before the 2008 financial crisis to own dollar-denominated notes that face declining returns as the Federal Reserve considers paring record stimulus.
JPMorgan Chase & Co. recommends sticking with U.S. high-yield bonds next year as the best protection against rising interest rates. Morgan Stanley cautions that valuations are unattractive following a record five-year rally.
While suing Standard & Poor’s for fraud, states from New Jersey to California ironically are helping fund the world’s largest credit rater’s legal defense by requiring that their pension funds use its rankings.
A shift by household investors from bonds into equities that Bank of America Corp. dubbed the great rotation is being muted as pension funds and insurers boost fixed-income assets to match future obligations.
Standard & Poor’s parent McGraw Hill Financial Inc. and Moody’s Corp. are recouping losses from the worst financial crisis since the Great Depression as shares of the companies flirt with record highs amid surging demand for corporate-debt ratings.