Yields on junk bonds plunge to historic low

Michael Bow
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JUNK bond yields fell below the five per cent barrier for the first time yesterday, marking a new wave of perverse asset pricing caused by quantitative easing and low interest rates.

Junk bonds, which are supposed to pay very high yields due to their riskiness, fell to a yield of 4.97 per cent last night, according to the Barclays US High Yield Index.

Low yields on government bonds has forced investors into high yields alternatives, driving yields down.