More Pain to Come for High-Yield Bonds

 

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Analysts on bloomberg predict that high yield bond yields will continue to rise into 2009 as default concerns heighten & hedge fund liquidations continue.  It was mentioned that there was a 3% default rate in debt payments by issuers in 2008.  That rate is expected to rise to nearly 8% in 2009 as companies profits fall which make them unable to refinance high yielding debt.