Economics
Once Hated, Now Loved: BBB Corporate Debt Is Back in Vogue
- Loomis, T. Rowe Price think the notes look relatively cheap
- Fed’s on hold, giving the market a ‘green light’ to buy
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There was a period of time late last year when BBB rated bonds -- those securities just above junk status -- were anathema in the corporate debt market.
Investors, fearful that these bonds were about to get hit by a wave of credit-rating downgrades, dumped them day after day in November and December. But now, in a sudden and surprising turnaround, these securities have become one of the most popular slices of the corporate debt market, having handed investors gains of 5.8 percent this year.