‘The Credit Risk Premium Is Now Negative’: How Expensive Are CCCs?

At various times over the past year, market participants have asked whether high yield was beginning to crack. Those questions reflect the ongoing search for the proverbial coal mine canaries that, if we could just identify them, would tell us something about when the bottom will ultimately fall out for stocks. In November, HY had a rough go of it, for instance, prompting more than a few notable names (e.g., Jeff Gundlach) to suggest that the tide might be going out on the riskiest of credits.