High Yield Spreads and Recession Risks

More corporate debt will plunge into distress when the US economy tanks, Marty Fridson, chief executive officer of Fridson Vision High Yield Strategy. “I have high confidence that we will get back to 1,000 basis points on the high-yield index as a whole at the worst point of the next recession,” the veteran credit strategist tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Spencer Cutter in the latest Credit Edge podcast. Corporate bonds trading at 1,000 basis points over Treasuries are usually seen by markets as being in distress, with a high likelihood of default. Fridson and Cutter also discuss energy sector bond opportunities, corporate bond default rates, ratings trends, the Federal Reserve put and liability management.

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