Credit Stress Is Everywhere With Asia Junk Debt at 2011 Lows
- Risk premium for Asian speculative dollar bonds at 2016-high
- Default swaps on investment-grade notes have also risen
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Signs of credit stress globally are increasing. In Asia, prices for the region’s riskiest debt slid to the lowest level in almost seven years, and the cost to protect against default climbed amid a sell-off in global markets.
The average price for junk-rated corporate notes fell to 90 cents on the dollar on Nov. 20, a level not seen since December 2011, according to an ICE BofAML index. Investors demand 730 basis points over Treasuries to own the debt, putting the risk premium at the highest since the first quarter of 2016, the data show.