Dec 9, 2018

The rise of UltraJunk bonds

90% of the debt issued out of private equity shops is rated B2 or lower, according to a new Moody's report. That's not just junk-rated, it's even worse than that.

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Data: Moody's; Graphic: Lazaro Gamio/Axios

If you look at junk-rated companies that aren’t sponsored by PE firms, only 40% of them have debt rated that low. Moody's credit-rating scale has 10 "investment-grade" ratings, from Aaa to Baa3. The bottom 11 ratings, from Ba1 to C, are considered "speculative," or junk. A B2 rating is deep into junk status and means there's a very significant chance you'll end up in default.

  • Junk-bond expert Leon Black, who cut his teeth working with Michael Milken at Drexel Burnham Lambert, says this market is in a bubble. According to S&P LDC, today's private equity deals have more leverage than at any point since 2007.

Go deeper: Apollo Global Management's Leon Black warns of credit "bubble"

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Updated 1 min ago - Politics & Policy

World coronavirus updates

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There are no COVID-19 patients in hospital in New Zealand, which reported just 21 active cases after days of zero new infections. A top NZ health official said Tuesday he's "confident we have broken the chain of domestic transmission."

By the numbers: Almost 5.5 million people have tested positive for the novel coronavirus as of Tuesday, and more than 2.2 million have recovered. The U.S. has reported the most cases in the world (over 1.6 million from 14.9 million tests).

U.S. coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.

Coronavirus antibody tests are still relatively unreliable, and it's unclear if people who get the virus are immune to getting it again, the Centers for Disease Control and Prevention cautioned on Tuesday.

By the numbers: More than 98,900 people have died from COVID-19 and over 1.6 million have tested positive in the U.S. Over 384,900 Americans have recovered and more than 14.9 million tests have been conducted.