Credit markets signalled intensifying concern over corporate America's debt pile on Friday, as a junk bond sell-off deepened and the cost of insuring against defaults rose to its highest level since 2016.

Exchange traded funds that track the high-yield bond market sank for a seventh day running... The cost of protecting against companies defaulting on their debt also soared, with both the investment grade and the high yield credit default swap indices produced by Markit rising to levels last seen at the end of 2016.

The moves reflect alarm over the effect of rising US interest rates on corporate credit markets, where companies have binged on cheap debt during a prolonged period of low rates that could be coming to an end. The size of the US corporate bond market has swelled to more than $9tn from $5.5tn in 2008.


Bond markets have endured a steady drumbeat of bearish commentary over the past week. The veteran hedge fund manager Paul Tudor Jones warned on Thursday that "we're in such a perilous time right now" due to "an enormous corporate credit bubble".

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