U.S. junk bond market is dying a slow death in December

Is the market for junk bonds dying? It looks like it, according to the latest numbers.

The Financial Times is reporting that there have been zero junk bonds sales in December as interest rates gradually inch higher and volatility rock global financial markets.

So far this month, there has yet to be a single U.S. company to borrow money through the $1.2 trillion U.S. high-yield corporate bond market. Should the trend continue, it would be the first month since November that not one high-yield bond was priced in the market.

The leveraged loan market has been in a downward spiral.

From Liberty Nation:

Leveraged loans are a trend that could send the economy spiraling out of control. This is a type of loan given to individuals or companies that already maintain vast sums of debt or have poor credit. Yellen echoed the sentiments of the current Fed leadership and other analysts, all of whom note that this is a $9 trillion debt bomb about to explode.

…

…leveraged loans are a severe threat to the economy, especially with interest rates gradually inching higher. But how did these corporations become so indebted? It was the central bank slashing rates to historic lows, facilitating businesses taking on enormous sums of debt. Some of the biggest companies in the U.S. today, from General Electric to Uber to Netflix, are deep in the red because of their frightening borrowing habits.

It’s a bloodbath out there.

(h/t EPJ)