The Fed is Now the Proud Owner of Bankrupt Hertz Bonds

from Zero Hedge

On March 23 – the day the S&P dropped to its cycle low of 2,237 – the Fed stunned capital markets when it announced it would purchase investment grade corporate bonds, traversing a Rubicon into secondary market intervention that not even Ben Bernanke had dared to cross. A few weeks later, on April 9, the Fed doubled down by announcing it would purchase not only junk bonds from “fallen angel” issuers (an announcement which came just days after a quarter in which a record $150BN in investment grade bonds were downgraded to junk, starting the long awaited tsunami of “fallen angels”), but would also buy junk bond ETFs such as HYG and JNK.

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