Distressed debt accounts for 1.1% of the high-yield market, falling from 27.5% last year, according to data from JPMorgan Chase. Demand for previously distressed bonds is fueling discussion about why investors are pouring money into the asset class. "The [Federal Reserve's] zero interest rate policy has been a catalyst for billions and billions of dollars flowing into the high-yield market," said Tim Donohue, managing director for high-yield markets at JPMorgan. "The government is holding down interest rates and, as a result, cash is chasing one of the few asset classes that still offers a healthy yield."

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