These borrowers’ success came at the same time investors were focused on macro news headlines that have been affecting markets: the longest-ever government shutdown, the rejection of Theresa May’s Brexit deal, a more dovish Fed, and earnings from Wall Street’s biggest banks. That may be a signal that there is a disconnect between the credit market and the broader market. Credit metrics have also somewhat recovered from a fourth-quarter rout, though investment-grade spreads remain near two-year wide levels and outflows came in at $1.1 billion last week.
If the U.S. investment-grade primary market is one of the " key drivers of what credit does in January," then investors’ willingness to buy what one group of strategists calls " bad boy bonds" amid a turbulent macro backdrop is a positive sign for credit markets.
Even with the improvements, some still have reservations. The concern over fallen angels “is still there over the long-term,” said Chavis.
This article provided by Bloomberg News.