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Weekly Market Summary
Oct 27 to Oct 31, 2025
Extra Credit*
- Year to date, fallen angels are outpacing rising stars, which would be a first since 2020. Year-to-date fallen angel volumes are $42bn compared with $32bn in rising stars. This would end a streak of four consecutive years (and seven of the last eight) having net rising star volumes. Outside of COVID, if YTD volumes hold through year-end, this would be the lowest volume of rising stars since 2010 and largest volume of fallen angels since 2016.
- Fallen angels [bonds that were initially rated as investment grade but have been downgraded to high-yield or "junk" status] have been heavily concentrated by sector due to the size of a few downgrades (. The year's uptick in downgrades was not the result of economic weakness or a particular sectoral decline, rather a few idiosyncratic stories with large capital structures. The average size of fallen angels this year has been much larger than those downgraded, at $3.5bn versus $2.1bn, making it possible for the volumes to outpace despite having a smaller number of unique tickers receive upgrades (12 versus18).
- Roughly 40% of all fallen angel bonds have eight or more years to maturity. Despite the lack of natural long-end high yield debt, fallen angels have historically contributed to this market, with almost half of all fallen angel bonds having at least eight years until maturity at the time of their downgrades. The next largest maturity buckets for fallen angel bonds are the 2y and 5y, which combined represent nearly 40%.
As of 10/29/25.
Previous reports
*Source: Morningstar®, Bloomberg, Credit Suisse. OAS is Options Adjusted Spread. 4-year discount margin is used for spread for bank loans. Yield quoted is yield-to-worst or equivalent calculation. YTD Low / High for yields are based on end of week and not intraday movements. Indexes and sub-indexes: Investment-grade corporates represented by Bloomberg US Corporate Bond Index. High-yield bonds represented by Bloomberg US Corporate High Yield Index. Bank loans represented by Credit Suisse Leverage Loan Index. The red and green arrows depicted under Yields, Option Adjusted Spreads, and Prices indicate a higher or lower value from the previous week.
Past performance does not guarantee future results. Index performance is not indicative of fund performance. Indexes are unmanaged and it is not possible to invest directly in an index.
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