(Bloomberg) -- U.S. junk bonds had a crude awakening yesterday as oil plummeted to a one-year low, pushing yields up to a 30-month high. High-yield energy bonds sold off most and outperformance by debt not exposed to that sector suggests lack of credit market contagion.
Oil prices are down more than 25 percent from the early October peak, which was the highest in almost four years. The yield on the high-yield energy index jumped to a 24-month high of 7.99 percent after its biggest increase in almost nine months.
The junk bond index, which is about 15 percent weighted in energy debt, lost 0.4 percent yesterday and is down 0.1 percent so far this month. The junk energy bond index fell 0.9 percent yesterday, while high yield ex-energy fell by 0.3 percent.
Energy sector junk bonds are down 0.36 percent in the year to date, compared to a 0.83 percent gain for the high-yield index.
The spread on the Markit CDX North America High Yield Index tightened this morning, while energy sector bond spreads widened.