The sharp correction and increased volatility in equity markets last March impacted negatively on co...
The sharp correction and increased volatility in equity markets last March impacted negatively on corporate bonds. As well as adding to uncertainty in the corporate environment, it increased the leveraging effect on company's balance sheets by increasing the level of debt relative to the market value of equity. The leveraging effect on their debt-to-equity ratios in turn undermined creditworthiness, especially for companies that already had high levels of debt, and increased the premium investors required in order to hold corporate bonds. Another factor that had a negative impact on the ...
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