Declining Economy Hits Hardest on Low-Grade Junk Bonds

The riskiest corporate bonds are dropping as signs of economic weakness spread, raising the specter of more defaults and distress.

Debt from companies rated CCC — the lowest tier of junk — fell by the most in eight months in May, led by a 23% plunge in Chinese bonds. It’s expected to remain under pressure from rising interest costs, declining earnings and dwindling access to capital as the economies of Europe, China and the US sputter.

Read More : Declining Economy Hits Hardest on Low-Grade Junk Bonds