AMWatch

Nordic AMs wary of risky corporate bonds triggering new crisis

The fear of increasing default rates from issuers of risky corporate bonds is promplting asset managers to take short positions in the asset class.

There is a growing concern among pension providers, economists and asset managers in the Nordic region that bonds with low credit ratings -- so called high-yield bonds -- are set to spark a new period of financial instability.

Since 2010, on a global scale corporate bonds in issuance have doubled to USD 12 trillion from USD 6 trillion (see graph below).

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