Firms that use borrowed money to lend to the smallest and riskiest companies are attracting cash at the fastest pace since before the crisis, wooing buyers with returns that are triple those of the broader junk-debt market.
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.
Sales of dollar-denominated corporate bonds soared to a record for the second straight year, led by speculative-grade borrowers that rushed to offer debt before the Federal Reserve cuts its unprecedented stimulus.
Air Medical Group Holdings Inc., the provider of emergency air transportation services, is marketing debt as sales of speculative-grade bonds to fund acquisitions triple from year-ago levels as a percentage of overall volume.
A gauge of U.S. company credit risk was little changed as data on consumer confidence increased. High-yield issuers will offer about $700 billion of debt next year, according to JPMorgan Chase & Co. analysts.