Shaken Junk-Bond Investors Get Wise to Risk, Northern Trust Says

Bondholders in the riskiest corners of the corporate debt market face more pain as highly levered companies line up to refinance their debt in a still high interest-rate environment, according to Northern Trust Asset Management.

“These wounds are fresh, and frankly still open in many cases as investors contend with creditor-on-creditor violence,” said Eric Williams, head of capital structure and senior portfolio manager at the firm, which oversees $1.2 trillion globally.

The list of controversial liability management transactions pitting creditors against creditors is growing, as companies exploit loopholes to raise new financing, often at the expense of existing ...