OECD warns of corp bond fire sale
By Phil Thornton
November 21, 2019, GlobalCapital
A slump in revenue growth during an economic downturn could trigger a change in investors’ risk appetite and a “widespread” sell-off of corporate bonds, the Organisation for Economic Cooperation and Development warned on Thursday.
The strong appetite for low-rated debt by investors searching for higher yields has created a specific vulnerability because these loans depend on a continuous stream of revenue to meet the coupon payments.
