Looming junk bond glut threatens high yield returns

US high yield issuance has soared in the past year, but an imminent wall of refinancings is raising longer-term concerns.

Looking at the level of investor support for new high yield bond issues in the US, one might be forgiven for thinking the dark days of 2008 and early 2009 had never happened. After a stuttering start, last year ended up seeing record issuance of $152.8 billion, according to Barclays Capital. But that figure is likely to be dwarfed in 2010: $66 billion of new deals came to market in the first quarter, compared with just $11 billion in the same period last year, and analysts predict issuance could