Debt-hungry sovereigns squeeze corporates out

Elevated government borrowing will be a fixture of the credit markets for the foreseeable future, as emergency spending and tax shortfalls heighten state financing needs. But could this excess supply of sovereign debt threaten demand for corporate bonds, and even squeeze weaker borrowers out of the market?

Bailing out the financial sector and setting up initiatives to stimulate the economy haven’t come cheap in the US or Europe, and most governments are still sorting out the bill. Added to that

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