Worst yet to come for junk debt as defaults loom, Goldman says


THE worst is likely yet to come for high-yield bonds as more defaults loom, according to Goldman Sachs Group Inc.

Such debt faces numerous headwinds, analyst Lotfi Karoui wrote in a note dated April 1. That’s even as the Federal Reserve’s unprecedented steps to pump liquidity into a financial system reeling from the coronavirus pandemic mean investment-grade bond spreads have likely already peaked, according to Karoui.

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