Fed Bubble Bursts in $550B Energy Debt Market
Bloomberg reported the ramifications of stimulus-induced bubbles is starting to play out in the market for energy-company debt.
According to Bloomberg , Deutsche Bank AG reported energy producers have raised $550 billion of new bonds and loans as the Federal Reserve held borrowing costs near zero since early 2010.
Bloomberg added investors are questioning the ability of some issuers to meet their debt obligations with oil prices plunging; CreditSights predicts the default rate for energy junk bonds will double to 8% next year.
To read the entire Bloomberg article, click here.