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Junk Bonds Face Wave of Defaults and Investor Losses

As the Wall Street Journal noted this morning (‘Investors, Fearing Defaults, Rush Out of Junk Bonds’), “the specter of widespread corporate defaults in the coming months has caused a massive selloff in junk bonds around the world, as many debt-laden companies face the prospect of going weeks or months with virtually no revenue.” In fact, […]

Oil & Gas Investment Losses

As the Wall Street Journal noted this morning (‘The Oil Crash is Hitting this Investment Hard’), “the plunge in crude-oil prices is sending shock waves through closed-end funds tracking the energy sector, highlighting how the market turmoil is hitting products popular with ordinary investors seeking to boost returns during the long bull market. Shares of […]

Corporate Bond Investors to Face Large Losses

With historically low interest rates before the recent market crash, corporate debt has skyrocketed.  According to the Federal Reserve Bank of St. Louis, Nonfinancial Corporate Business Debt has eclipsed $6.5 Trillion.  Low interest rates have given rise to “zombie corporations.”  A “zombie corporation” only generates enough revenue to service its own debt, and as a result, […]

Recent Volatility Puts Margin Traders at Risk

With the influx in volatility and the arrival of the U.S. stock market’s first Bear Market in more than a decade, those trading on margin may be exposed to forced liquidations and/or margin calls following the market’s recent, aggressive selloff. Broker-dealers require those trading on margin to maintain as collateral a specified percentage of qualified […]

H2O bond funds lose 50% of their asset value

H2O Asset Management’s bond funds have lost nearly half their value in a matter of weeks, after the London-based fund manager experienced another day of severe losses on Thursday. H2O, a subsidiary of French bank Natixis that managed about €30bn of assets at the start of the year, has emerged as one of Europe’s highest-profile […]