Investors around the world are running away from almost anything smacking of risk in capital markets.

Sales in the U.S. junk-bond market have stalled, Chinese lenders are bracing for a new bout of defaults, and initial public offerings — from First Data Corp. to Albertsons Cos. — have been marred by investors uneasy about opening up their wallets. Blaming adverse conditions, Petroleo Brasileiro SA, the world’s biggest junk-rated borrower, canceled plans for its first local-currency bond sale in 15 years.

The cautiousness among investors stems from worries over global growth, spurred by a slowdown in China’s economy. That comes as the largest central banks mull easing policies that have failed to provide a strong boost to their economies. Several upcoming offerings may test investor appetite for risk, including the debt Dell Inc. is expected to issue for its $67 billion purchase of EMC Corp.

"Everyone has become conservative at the same time," said Ashwin Bulchandani, chief risk officer at investment firm MatlinPatterson. "Investors are wondering if the uncertainty and growth concerns are temporary or is something more sinister going on in the background. You’ve got a particularly messy cocktail of things coming together at one point."

The corporate junk-bond market in the U.S. is in the midst of an unprecedented slowdown, seven years after a boom in such debt spurred by the Federal Reserve’s easy-money policies. The market’s on pace for its slowest October since at least 2005, according to data compiled by Bloomberg.

Bond Deals

Only one such deal has priced in three weeks, and those unable to wait have tried and failed. Canadian organic food company SunOpta Inc. and machine-parts maker NN Inc. scrapped bond deals and may be forced to lean on their banks to provide backup financing.

A Goldman Sachs Group Inc.-led group of banks is struggling in its bid to raise $2.8 billion of debt for Concordia Healthcare Corp., after having provided committed financing for the Canadian pharmaceutical company’s acquisition bid.

"Most of the people we are talking to, unless they are forced to come, are waiting on the sidelines for a better day," John Gregory, the head of leveraged syndicate at Wells Fargo & Co., said in an interview. "We are prepping them to hit the market when there are windows of opportunity. I don’t think volatility is going to decrease through the end of the year."

Baltimore-based T. Rowe Price has reduced its exposure to high-yield bonds in its target-date retirement funds, said Mark Vaselkiv, manager of the $9.5 billion T. Rowe Price High Yield Fund.

Dell Raise

“Sentiment is terrible,” said Vaselkiv. “There is a lot of pessimism about the world as a whole.”

Dell is planning to raise up to $49.5 billion to fund the largest tech deal ever, according to a filing. Even if just a quarter of that is raised in the U.S. high-yield market, it could be a record junk-bond offering.

"That is a big number and we’ll see what the appetite is,” said Michael Rosen, chief investment officer at Angeles Investment Advisors in Santa Monica, California. 

Ghana, which sold $1 billion in debt this month at 10.75 percent, is an example of a borrower that has been forced to offer a higher yield, according to Rosen

“Poor-quality borrowers, which they apparently are, have to pay up,” Rosen said. “I think you see that across the board."

China’s Market

Slowing economic growth is adding to strains in China’s 42.2 trillion yuan ($6.6 trillion) bond market, which has had five defaults this year, according to China International Capital Corp.

China’s National Development and Reform Commission will ask holders of Sinosteel Co.’s bonds not to sell them back on an option date next week, people familiar with the matter said. The steel trader’s parent Sinosteel Corp. sent a letter to noteholders pleading with them to not exercise the option, two of the people said. If they do, the firm will struggle to repay, China Merchants Securities Co. said. The NDRC didn’t immediately reply to a fax seeking comment. Two calls to the press office at Sinosteel Corp. went unanswered.

In the equity markets, in just the last week, Digicel Group Ltd. canceled its IPO plans, grocery-chain Albertsons postponed its offering and First Data was pushed to price its shares below below the marketed range.

Anxiety about corporate profits drove those decisions. Wal- Mart Stores Inc. predicted earnings will decline next year and quarterly results from JPMorgan Chase & Co. disappointed.

Investors aren’t in any hurry to rush back in after the most recent bout of volatility, according to Wells Fargo’s Gregory.

"It’s really really hard to assess risk," he said. "How do you put money to work when you don’t know what tomorrow is going to bring?"