Corporate bonds in 'a coma' as pricing risk becomes a difficulty

It has been an unprecedented year for credit markets, but volatility also brings opportunity. Corpo...

It has been an unprecedented year for credit markets, but volatility also brings opportunity. Corporate debt might now be at its highest-ever yield spreads relative to government bonds - the question is whether this offers value given the worsening economic outlook. Attempting to gauge the length and depth of what is fast becoming a highly synchronised global downturn is a dangerous game to play. The corporate bond market is in 'a coma' - the basic functions of pricing credit risk have broken down. Market illiquidity provides a significant cost barrier to investing; the threat of more d...