- Corporate bonds. According to the WSJ, the price of Apple bonds has sunk to 90% of face value: "The loss from the high point to the low is around three years' worht of coupon income — a big hit". Corporate bond prices have fallen slightly more than ultra-safe Treasury bonds. Not good from a discount rate perspective! A good source for corporate bonds: KDP High Yield Daily Index.
. Credit Default Swaps. Speaking of discount rates, the iTraxx Europe Crossover Index trades again above 400bps. You can track this very important index on page 28 of the WSJ. See also the Markit website.
. Brazil rating outlook. From Bloomberg: "S&P lowered yesterday the outlook on Brazil’s BBB rating, which is two levels above junk, saying it was concerned by the country’s sluggish economic growth, weakening fiscal accounts and loss of credibility with investors. S&P also cut the rating outlook for state-controlled companies Petroleo Brasileiro SA and Centrais Eletricas Brasileiras SA. The nation’s $2.2 billion of bonds due 2023 fell 0.19 cent to 92.40 cents on the dollar, the lowest price on a closing basis since the notes were issued in September, according to data compiled by Bloomberg. Yields rose 3 basis points, or 0.03 percentage point, to 3.57 percent" (*). Note how closely corporate rating changes follow on the heels of a change in sovereign ratings.
(*) Katia Porzecanski & Blake Schmidt: "Brazilian Dollar Bond Slump Deepens as S&P Lowers Rating Outlook", Bloomberg, 7 June 2013.
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