Much has been said about the fact that BBB-rated bonds now make up the majority of investment grade bonds in the US, UK and Europe. A lot of pessimistic market pundits fear that during the next recession, a lot of these BBB-rated issuers could get downgraded to junk and as a result suffer significant losses as many institutional investors are forced to sell these fallen angels. I have argued in
The threat from BBB-rated bonds is overrated
The threat from BBB-rated bonds is overrated
The threat from BBB-rated bonds is overrated
Much has been said about the fact that BBB-rated bonds now make up the majority of investment grade bonds in the US, UK and Europe. A lot of pessimistic market pundits fear that during the next recession, a lot of these BBB-rated issuers could get downgraded to junk and as a result suffer significant losses as many institutional investors are forced to sell these fallen angels. I have argued in