By Alwyn Scott and Kate Duguid
By Alwyn Scott and Kate Duguid
NEW YORK, March 19 (Reuters) – From airways and cruise strains to retailers and power firms, buyers are fleeing giant pockets of the company credit score market, apprehensive that the coronavirus pandemic will result in bankruptcies, defaults and credit standing downgrades.
The premium buyers demanded to carry riskier junk-rated credit score rose to 904 foundation factors over safer Treasury securities on Wednesday, its highest degree since 2011, in line with the ICE/BofA high-yield index .MERH0A0.
The premium for safer investment-grade credit score rose to its highest since 2009, at 303 foundation factors over Treasuries, primarily based on the ICE/BofA investment-grade index .MERC0A0. The chance premium for each has roughly tripled for the reason that begin of the yr.
With liquidity quickly drying up in short-term funding markets and extra firms drawing down on their credit score strains, the Federal Reserve has taken a raft of measures over the previous week to ease the pressure, together with urging banks to make use of its low cost window and offering money by means of the business…