A Record $535 Billion of Junk Bonds Must Dodge Pockets of Risk

Companies around the globe sold an unprecedented amount of junk bonds in the first half after borrowing costs fell to record lows, raising the stakes for investors to navigate pockets of increasing risk.

The issuers priced about $535 billion of speculative-grade notes across currencies, the most for any half year and a 49% increase from a year ago, according to data compiled by Bloomberg. Junk-bond yields in the U.S. dropped to an all-time low this week and costs for riskier companies to borrow in euros aren’t far off.

With valuations for high-yield notes in many regions already stretched ...