High-yield managers concerned on record junk-bond issuance

Bond fund managers have warned they are concerned about the quality and risks of some debt coming to market after a record 12 high-yield bonds were issued last week.

Dometic and Ideal Standard were two of the groups that issued bonds, both of which were CCC-rated. Cazenove’s Peter Harvey, manager of the £630m Strategic Bond fund, says he has never seen such a high level of issuance in Europe in a single week. He says he is concerned over the deal quality, especially at the CCC-rated end. “It is an absolute frenzy, I have never seen anything like it, it should definitely be causing investors concern, and you have to question where the money is coming from to invest in these issues,” he says. The rate of junk-bond issuance has roughly doubled yea...