By Matt Wirz
The selloff in stocks is spreading to junk bonds, hitting lower-rated corporate debt.
A bond due 2030 that online furniture vendor Wayfair recently issued near par, or at close to 100 cents on the dollar, dropped this morning to 92 cents on the dollar, according to MarketAxess.
A 10.75% bond from Staples, due in 2029, sank to about 85 cents on the dollar. Many of the products the companies sell are imports that are exposed to the new tariffs.
Investors also dumped bonds of companies dependent on discretionary spending like JetBlue Airways and cruise-line operator Carnival.
The selloff is likely to slow the sale of new corporate bonds rated below investment-grade. A $1 billion bond issued yesterday by healthcare-logistics company Owens & Minor dropped to 98 cents on the dollar-a $20 million paper loss for investors in less than 24 hours.
Eric Hess, a high-yield bond fund manager at Newfleet Asset Management, said that for now, he is looking for buying opportunities and hoping that at least some of the recently announced tariffs get rolled back.
" If things haven't changed in the near future then we'll probably be fundamentally rethinking our portfolios," Hess said.
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(END) Dow Jones Newswires
April 03, 2025 12:04 ET (16:04 GMT)
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