|
|
Article: New HY Bonds May Not Be So Secure.(News)
- Article from:
- Bank Loan Report
- Article date:
- November 9, 2009
CopyrightCOPYRIGHT 2009 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
Byline: Matthew Sheahan
The order of the day on the high yield primary market is senior secured bonds, but some market analysts say that the "secured" label doesn't necessarily guarantee a strong position come recovery time.
Nearly 40% of the high yield bonds issued in 2009 through September came in the form of senior secured notes, according to Fitch Ratings. Only 6.5% of high yield bonds prior to 2009 were secured.
Companies are pricing secured bond deals for several reasons, not the least of which is that security makes the bonds more attractive to investors, especially since many of these offerings are refinancing secured bank debt. Secured ...