So-called covenant-light loan issuance has soared to $155B YTD, beating the 2007 record of $96.6B. Junk bond (HYG, JNK) sales are up 24% YTD vs. the same period a year ago. Sales of payment-in-kind notes (PIK) - in which borrowers pay interest not with cash but with more debt - of $6.5B YTD are on track to top 2012's $8.1B. Bonds sold with the lowest tier CCC rating made up 10.3% of high yield bond YTD, the most since 2011.
"Taper's a lock folks," concludes Brown ... "And it couldn't come soon enough."
The 10-year Treasury yield is off 1 basis point today to 2.57%.