High-Yield Energy Bonds Are Getting Crushed

High-yield bonds are selling off. 

On Monday, we highlighted a report that said Josh Birnbaum, the ex-Goldman trader who made big bets against subprime mortgages during the financial crisis, was now targeting high-yield bonds. 

But the concern surrounding the high-yield bond space is really about one thing: energy bonds. 

The energy sector comprises about 15% of the high-yield bond market, and amid the decline in the price of oil, concerns around some of this debt have increased as companies see oil fall below what may be their "breakeven" price of production.

In a note on Monday, Kevin Horan at S&P Dow Jones Indices highlighted the following chart, showing that while there is weakness in the high-yield bond space, this weakness is really about high-yield energy bonds. 

Through Friday, high-yield bonds as a whole were down about 3% this month but still up 1% this year. 

Meanwhile, high-yield energy bonds were down more than 8% this month and more than 9.5% this year.