The secured bond market - a new trend?

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As the joint loans move maturities, companies have been refinancing them by supply bonds (some $60 billion of HY issuance has been utilised to clear downbound loans this year). With demand for immobile income continuing to surprise on the upside, newborn stick issuance has been quite strong.

However whatever weaker, more leveraged, or less famous names, had to use a trick to entice investors. As the confirmatory committed for loans got freed up (with loans effort repaid), the companies committed it to the newborn stick holders. These are the so-called secured bonds, and different standard joint bonds which are general obligations of the company, these bonds have limited confirmatory committed against them. Nearly 40% of past stick issuance has been in secured bonds.

The interpret below shows that much bonds were generally utilised as a refinancing agency (instead of top investments or acquisitions.)



source: composer Reuters


The question ease remains whether this is a long-term trend. It would stingy that the leveraged loan mart at least in conception is effort replaced with secured bonds. But demand for leveraged loans also continues to be high, especially as whatever existing listing is effort paying down. If the loan syndication mart recovers, secured bonds may embellish a temporary phenomenon.


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