China just darkened the future for riskier corporate credit around the world.
The world's second-biggest economy shocked markets this week by depreciating its currency by the most in two decades, with the goal of aligning the yuan more closely to the market rate. In response, the average price of dollar-denominated junk bonds plunged to its lowest level since 2011.
Debt of some energy companies, including Energy XXI Gulf Coast Inc. and Sandridge Energy Inc., fell more than 5 percent on Tuesday alone, Bank of America Merrill Lynch index data show. And China's move deepened losses on obligations issued by U.S. metals and mining companies, which are already suffering their highest default rate since 2003.
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