Distressed debt Stressing out

Hedge fund managers have been diligently reading up on rating agencies’ predictions. Moody’s and Standard & Poor’s are forecasting corporate defaults to shoot up next year, following last year’s record issuance of high-yield debt. It appears some savvy funds are now positioning themselves to take advantage of the coming bust. They needn’t take rating agencies’ word that the credit cycle is turning. High-yield issuance has dropped sharply this year. Investors in high-yield bonds are forcing issu...