Corporate Bonds rated BBB (one notch above ‘junk’) now comprise half of all investment-grade bonds.

 

 

Reasons run the gamut from operations (e.g. investing in new plant, equipment or human capital) to financial engineering (e.g. borrowing money at low rates to finance dividends and stock buybacks) and so forth.

Why is seemingly less important.  Of more importance is what will happen to the investment-grade market should interest rates rise and increase the cost of carrying these debt loads.  Just how safe is that investment-grade credit?  Hmmm…