Breadcrumb trail navigation:
By John Plender
Published: February 22 2011 17:38 | Last updated: February 22 2011 17:38
Here we go again. The start of the year in debt markets has been marked by record low yields on junk bonds, declining underwriting standards and a return of the more dangerous innovations of yesteryear such as payment-in-kind toggles which allow borrowers to issue more debt to pay the interest bill. Even covenant-lite loans, where normal borrowing conditions are shelved, have made a comeback in the leveraged buyout market and elsewhere, at a time when hapless small and medium sized firms are hard pressed to find credit.
Not only is all the paraphernalia of the credit bubble with us once more. The rhetoric of the bubble is back too, with bankers referring joyfully to renewed levels of creativity in the market that have not been seen since mid-2007. That really scares me. What is going on?
You have viewed your allowance of free articles. If you wish to view more, click the button below.
Read Full Article »