The pandemic’s economic shutdowns prompted dire warnings that record volumes of corporate bonds could lose their investment-grade ratings and become what investors call fallen angels. Fallen angels peaked in March, when about $83 billion of investment-grade corporate bonds were downgraded to junk, according to JPMorgan Chase & Co. estimates. In April, the Federal Reserve extended its corporate-bond purchase programs to issuers that lose their investment-grade ratings after the onset of the pandemic in late March. Mr. Beinstein had predicted a record $215 billion of fallen angels in 2020, but he now thinks the full-year total is likely to fall short of that. Industries most affected by the downturn, such as airlines, retail and the oil-and-gas sector, saw some of the heaviest downgrades as companies’ debt loads became less sustainable.

Source: Wall Street Journal September 28, 2020 09:33 UTC