Weakening fundamentals in high yield create a dramatic uptick in fallen angels

We have seen a contraction across earnings, revenue growth and interest coverage, along with an increase in leverage. The key takeaway here is that fundamentals have weakened and that has contributed to a rise in defaults and a tremendous surge in fallen angels - debt downgraded from investment grade to high yield ratings. Fed support has kept the market in check Softer fundamentals have contributed to a big pick-up in defaults, which began to increase sharply in March and continued to climb in Q2 and thus far in Q3. We are seeing distress across most sectors, though it is most pron...