May 24, 2021
Tight credit spreads might be keeping many fixed income investors from heading into corporate bonds, but funds like the
“U.S. President Joe Biden’s pension bailout might do more than just support troubled retirement plans,” a Bloomberg article said. “It could also spur tens of billions of dollars in demand for corporate bonds with the lowest investment-grade ratings, according to Citigroup Inc.”
“Struggling multi-employer pensions, which are often tied to unions, will be able to apply for special financial assistance, thanks to the $1.9 trillion pandemic-relief bill signed into law in March,” the article added. “Pension Benefit Guaranty Corp., which insurers the plans, will make a single lump-sum payment to eligible funds.”