I’m cruising on Carnival to Mexico in October. They have the ships, the business and the customers. No one cares about debt when they’re making money. Their debt came from government-mandated shutdown, not customers walking away.
Their creditors are competing with each other offering them money. They know in a recession returns are harder to come by and cruise lines are comparatively more lucrative for creditors due to customers already having savings thus independent of economic activity. This is the type of business creditors want to lend to when they anticipate economic downturn. Hence the better rates they offer.
And we continue to disagree. Those aren’t good rates. They are junk bond rates. They are only good in comparison to the Ford - Carter years.
I stand corrected - junk bond yields appear to be in the 8 - 9 percent range. So worse than junk bonds.