Theres a lot of bad news out of corporate America these days.
Bankruptcies are increasingly common, companies are struggling to make on-time interest payments and the latest earnings reports are expected to be disappointing. So its rather odd that investors are flooding into the most distressed bonds, with the debt set for its best two-month performance since 2009.
Even debt of officially insolvent companies has experienced a pop. Consider Energy XXI, which filed for bankruptcy protection on Thursday. Its bonds rose to 22.8 cents on the dollar from 10.8 cents in February. Something similar has happened to bonds of Peabody Energy since it filed this week.
Up With Bankruptcy
The price of Energy XXI’s bonds rose aft…
Read the full article at: http://www.bloomberg.com/gadfly/articles/2016-04-14/when-insolvency-is-great-news-for-credit-traders