Europe's Junk Proves Safer Than Risky Bank Debt

Investors are judging junk bonds sold by companies in Europe to be safer than banks’ riskiest debt for the first time on concern lenders may lose money amid the region’s sovereign deficit crisis.
The extra yield buyers demand to own high-yield non- financial notes instead of government securities fell below that on bank subordinated debt on Jan. 6, and is now 29 basis points lower, according to Bank of America Merrill Lynch index data. Before November, speculative-grade bond spreads had never been within 100 basis points of those on bank notes, which on average are rated eight steps higher.

http://www.bloomberg.com/news/2011-01-16/europe-s-junk-bonds-proving-safer-than-riskiest-bank-debt-credit-markets.html