Salient to Investors:

International regulators are concerned that record sales of high-yield payment-in-kind bonds will cause losses for investors when central banks tighten monetary policy.

PIK bond sales more than doubled in 2013 from 2012. BIS said 30 percent of issuers before the 2008 financial crisis have since defaulted. BIS said low interest rates on benchmark bonds have driven investors to search for yield by extending credit on progressively looser terms to firms in the riskier part of the spectrum.

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