JP Morgan estimates that junk bonds have lost almost 4% of their value since the beginning of the year, or $35 billion. The largest losses are at OppenheimerFunds, Fidelity, and John Hancock.
The debt is likely to “struggle” for months as the economy enters a recession, according to JPMorgan Securities, writes Bloomberg.
Raising money or refinancing debt in the high-yield market is also likely to be close to impossible, cutting off an important supply of capital to a large number of companies.
Douglas A. McIntyre