Europe’s high-yield bond market — for issuers with a poor credit rating — has virtually been shut for the last six weeks because of the continent’s debt crisis, posing a headache for those who are facing debt maturities as early as next year.
With July – the month that bond maturities are expected to peak – fast approaching, some fixed rate bond providers have upped their game in the competition through increased rates, offering higher returns for savers.
Treasury prices turned lower Friday, extending sharp losses from the previous session and pushing longer-term yields to six-month highs.
The Australian bond market closed weaker on Friday, taking the lead from the negative reaction of major global bond markets to news overnight that ratings agency Standard & Poor’s had downgraded its outlook for the UK government.
The U.K. failed to find enough buyers for 1.75 billion pounds ($2.55 billion) of bonds for the first time in almost seven years as debt investors repudiated Prime Minister Gordon Brown’s plan to stem the worst economic crisis in three decades.
Bonds prices fell dramatically on Thursday afternoon after the government said it plans to sell Rs 2.4 lakh crore of bonds in the first half of the fiscal year that begins on April 1. The amount to be borrowed is much more than what market participants expected.
Ireland’s government debt-rating outlook was lowered by Moody’s Investors Service, which said the financial crisis is likely to “significantly affect” the country’s economic strength.
