‘Fallen Angel’ Junk Tally Continues to Rise
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The junk bond market may be about to get significantly bigger.
The number of companies with credit ratings downgraded to “junk” status could be headed for another record year, Standard & Poor’s said Monday.
“Globally, the annual total number and dollar value of ‘fallen angels’ this year will rival those of 2001,” the ratings firm said.
Fallen angels, companies that lose investment-grade ratings, have been on the rise for six years, S&P; said. So far this year, issuers with $47 billion of bonds have been cut to junk, a rating of BB-plus or lower, S&P; said. Last year, a record 57 issuers with $107 billion of debt were cut to junk.
S&P; said 69 issuers worldwide now are one notch above junk and are on review for downgrade or have a negative credit outlook.
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