Oracle Corp. and Stellantis NV are drawing attention in the corporate bond market as some of their investment-grade debt trades at levels more commonly associated with junk-rated issuers. The shift is raising concern that a larger group of borrowers could be edging toward so-called fallen angel territory.
The term fallen angel is used when a company loses its investment-grade rating and drops into the high-yield market. Recent trading suggests investors are demanding wider spreads from certain high-grade issuers, a sign that confidence has weakened even before any formal downgrade occurs.
According to the report, roughly $100 billion of debt has been trading like junk, putting credit investors on alert for a possible new wave of fallen angels. That matters because downgrades can reshape demand across the bond market, forcing some funds to sell while drawing in buyers that specialize in riskier debt.
For now, the focus is on whether this pressure remains limited to a handful of names or spreads more broadly across corporate credit. If more investment-grade bonds continue to trade near junk levels, the market could be entering a more fragile phase for highly rated borrowers.
