The credit ratings agency forecast that the junk default rate will be 4% this year, up from 3.5% in 2015.
There were three times as many debt-issuing companies on negative credit watch as on positive at the end of 2015, S&P says.
Investors "continue to trade away protections and take on more risk in search of higher yields," says a Moody's analyst.
Speculative-grade companies spent an amount equal to four times their discretionary cash flow on dividends and buybacks in 2014, says Moody's.
Investors' hunger for yield is leading to still-weaker covenant protections on noninvestment-grade corporate bonds.
Exploration and production companies have amassed total debt of $285 billion and their leverage metrics have increased notably, says an ABI Journal paper.
BofA Merrill Lynch's research team says the bull market will continue, but higher volatility, wider credit spreads and lower liquidity are on the horizon.
Speculative-grade issuers have to give a little more to get investors to buy new bond offerings.
Should the economy come under stress, a large number of leveraged loans could default and cause record losses, according to one banking regulator.
With the Energy Future Holdings bankruptcy, leveraged buyouts now represent 31 percent of all bond and institutional loan defaults since 2007.
Time to sweep away an artificial distinction in the world of corporate debt issues.
Companies have taken advantage of investors’ growing willingness to buy speculative bonds.
