DISTRESS WATCH: Analysts Warn of Complacency As War Drags On

Analysts are warning that credit investors should be more concerned about ramifications from the US war with Iran, a conflict entering its third week with few signs of it ending soon.

Risk premia in the equity and credit markets are close to 20-year lows, levels that are “not appropriate” given geopolitical tensions, a weak US labor market and pressures in the corporate bond sector, Sebastian Raedler, head of European equity strategy at Bank of America, told Bloomberg TV. In such an environment, spreads in the US high-yield market should be at least 100 basis points wider, he said.

His ...