Financial Times FT.com

Plummeting cost of protection contains its own pitfalls

By Paul J Davies

Published: January 31 2007 02:00 | Last updated: January 31 2007 02:00

The question in European credit markets at the moment is not so much "When will the cycle turn?" but "When will investors even see a corporate bond default?"

Strength in profitability and economic growth along with relatively low interest rates continue to provide the benign backdrop that has seen default rates slump to zero, even among junk-rated debt, for more than a year.

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