America’s high-yield debt is on ever-shakier foundations

INVESTORS IN COMPANIES issuing high-yield or “junk” debt have had a relatively benign pandemic. Usually such highly leveraged borrowers are stung by economic hardship. During the global financial crisis over a decade ago around a seventh of such firms in America defaulted on their debt in one year. Yet according to Moody’s, a rating agency, less than 9% of them went into default in the year to August 2020, and the rate has continued to drop since. By the end of 2021, a booming recovery should put it back below its long-term average of 4.7%