The junkiest credit gilded its appeal this year, racking up hefty gains as markets turned increasingly risk-on. But rates staying elevated for longer crushes weak borrowers with a lot of debt due, signifying more distress ahead.
Credit investors were rewarded for bravery in 2024, bagging 15% gains from CCC bonds - almost double the return from less risky debt. That builds on last year’s rally which accelerated as forecasts for jumbo easing from the Federal Reserve - which never happened - rolled in.
