Market Insider

Red flag waves over junk bonds as money pours into high yield

Traders signal orders on the financial floor at CME Group's Chicago Board of Trade.
Tim Boyle | Bloomberg | Getty Images

Yet another warning flag was raised Wednesday over the high-priced junk bond market.

In the bond market, you're only as good as your promises, and Moody's latest report on covenant quality shows that some of the promises in the high-yield market are looking pretty weak.

Moody's said the quality of covenants that govern high-yield corporate debt are at a record low, while high-yield prices are close to record highs and investment in the sector continues to grow.