BBBs Are Back in Style as `Fallen Angels' Freakout Fades Away
- Two-thirds of IG supply from companies rated in lowest tier
- Deals executed successfully despite concerns about BBBs
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Investors are showing renewed appetite for the riskiest investment-grade debt as fears about a flood of “fallen angels” prove overblown.
Bonds rated BBB -- the lowest ratings tier above junk -- by at least one ratings agency have comprised two-thirds of new supply in the investment-grade market in the first 11 trading days of the year, a drastic reversal from last quarter’s BBB presence of less than one half, according to data compiled by Bloomberg.