Companies that are being blamed for sparking blazes are seeing their assets drop.
Higher-for-longer interest rate expectations make it a good time to be a credit investor, the firm says.
The ratio between companies' earnings and their interest expense has fallen to the lowest level since the pandemic.
Annuit sales reached a record high of $385 billion last year.
Bank of America sees rates, earnings and issuance challenging credit this year.
Banks are offering fewer loans as lending standards tighten and demand weakens.
The recent spike in bond yields may have briefly cooled the market, but the pace of borrowing has been blistering.
The credit grader expects the high-yield default rate to be as high as 5% by the end of this year.
Performance of leveraged loans is on track to hit 10% this year if prices stay at current levels, according to one manager.
The move comes after Facebook parent Meta Platforms raised $8.5 billion in its second ever bond sale last week.
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