These Are The World's Most Actively Traded Distressed Bonds

Now that everyone is finally looking at junk bonds with hopes to buy, sell or short as one's inclination may be, everyone is realizing something we have been warning about since 2012: when times of stress emerge, either the Bid/Ask spread is gargantuan (good luck with those "subject" quotes from dealers who have no inventory), or there is simply no market as the first hint of a buyer or seller make bond traders the carbon-based equivalent of an HFT algo, and pull their quotes. In short: there is no liquidity.

Luckily, there are some very distressed bonds (spread over 1,000 bps) which still trade in volume. The table below, courtesy of Bloomberg, lists the bonds with the largest one-day volume among those that traded yesterday on TRACE at a spread of 1,000 basis points or more than their government benchmark.

For those who want to join the junk bond fray, on either side of the trade, but don't want to be locked out in an illiquid market, these may be your best bets.

Source: BBG Brief

Comments

[taketheredpill]

So how many Eons..Millenia will it take to sell down the Billions in the HY ETFs?

[Dead Canary]

I tuned into CNBC this morning and heard an unusual opening story.

Uh, there's only one story today:
Sell.
Sell it all.
Sell it now.  NOW!
No, this is NOT a buying opportunity.
Do not buy the fuckin dip.

So. Uh, we are going to spend the rest of the day showing soothing pictures of puppy's and majestic forest scenes.

(pssst. sell. selllllllll.)

[ShrNfr]

Just make sure you understand which of those dogs is trading flat.

[PrimalScream]

TRADING in highly distressed bonds.

TRADING in thin markets with no liquidity.

TRADING in specialized markets with "imaginative quant formulas" for derivative prices

This is the eminent domain of Fools, Lunatics and the Insatiably Greedy.

And people wonder why it is "1929 all over again" ???

[highandwired]

It's NOT "1929 all over again"...this will be much much worse

[buzzsaw99]

oh yeah, fcx was gonna go to the moon bitchez. right along with clf, aci, and all the other momo miners. hahahahahahaha!!

and so, your life has failed

you've made the progress of a snail...

[/tiger lillies]

my guess is all those pukes who invested in all those miners have never been near a mine. there is no lower margin, higher overhead, depressing place on earth. i went into a cleveland cliff's (cliff's natural now) mine back in the 1970s. egad, i thought they were done for back then. the pumps ran 24/7 just to keep it from flooding. the equipment cost was ghastly and iron prices were low. how the hell anyone thought that stock was worth $100 boggles the mind.

[Junerberno]

Chesapeake bonds trade at a yield of 36.7%.

Chesapeake CDS trade above 30(%).

Chesapeake is bankrupt.

But they are not, of course. Management continues to pay itself and the bondholders refuse to write the bonds down to $0 on their books.

Goldman arranged a multi-billion dollar bailout of Goldman's exposure. Likely offed to pension funds.

Remember this the next time a Republican scolds a poor person (or college athlete) that "they don't know how to manage their finances."

[headhunt]

"Remember this the next time a Republican scolds a poor person (or college athlete) that "they don't know how to manage their finances."

One of the stupider statements this year

[Wolf in the Wilds]

You are kidding. What is the size of Men's Warehouse bond issue? US$600m? And Petroleos? US$3b? the volume is atrocious

[Darkdoc]

As the tide goes out (cheap money disappears) we get to see who forgot to wear a bathing suit.  So sad...

[Omega_Man]

what is yield to worst?
coupon is rate?