Junk Bonds Resume Sharp Selloff
December 14 2015 - 11:10AM
Dow Jones News
Junk bonds were hit with a fresh selloff on Monday, reflecting
continued concerns about the health of risky companies and ripple
effects from the closure of a junk-heavy mutual fund.
The iShares iBoxx $ High Yield Corporate Bond ETF was down about
0.70% Monday morning, after shedding 2% on Friday in its worst
plunge since 2011. Many individual bonds were also in the red,
including debt backed by electric utility Dynegy Inc., telecom
Charter Communications Inc. and oil producer Oasis Petroleum
Inc.
Traders said debt from energy companies continued to be weak in
Monday trading, underscoring worries that many are headed toward
default if oil and other commodity prices stay low. Oil prices have
fallen in recent weeks amid concerns about slowing economic growth
overseas, and oil prices were down again early Monday.
Many investors were spooked last week when Third Avenue
Management LLC said it would close the $789 million Third Avenue
Focused Credit Fund and would hold off giving shareholders money
back for months or more. The firm has since parted ways with Chief
Executive David Barse .
Write to Mike Cherney at mike.cherney@wsj.com
(END) Dow Jones Newswires
December 14, 2015 10:55 ET (15:55 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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