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Inflation Risk Sinks 80% of Europe’s Company Debt Sold This Year
Buyers of newly-minted corporate bonds are already nursing losses as inflation fears send government bond yields climbing. About four fifths of high-grade non-financial corporate bonds priced in Europe this year are quoted below their issue price, based on data compiled by Bloomberg. Last Friday, the share of post-issue losers stood at under 50%. This bleak statistic underscores the damaging effect on credit investors of the so-called reflation trade -- bets on rapid economic recovery and an associated pickup in inflation -- prompting many to seek shelter from further sovereign debt sell-offs. Investment grade bonds ... (full story)