The secured bond market - a new trend?

Thank you for visiting my Blog
As the corporate loans move maturities, companies have been refinancing them by supply bonds (some $60 billion of HY issuance has been utilised to pay down loans this year). With demand for fixed income continuing to surprise on the upside, newborn stick issuance has been quite strong.

However whatever weaker, more leveraged, or inferior known names, had to ingest a gimmick to entice investors. As the collateral pledged for loans got free up (with loans effort repaid), the companies pledged it to the newborn stick holders. These are the so-called secured bonds, and different standard corporate bonds which are general obligations of the company, these bonds have limited collateral pledged against them. Nearly 40% of recent stick issuance has been in secured bonds.

The chart beneath shows that much bonds were generally utilised as a refinancing tool (instead of capital investments or acquisitions.)



source: composer Reuters


The discourse ease remains whether this is a long-term trend. It would stingy that the leveraged give market at least in part 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 give syndication market recovers, secured bonds may embellish a temporary phenomenon.


SoberLook.comwww.SoberLook.com be Sure you bookmark this page. Thanks...
Generated by best funky, gaul abizz.
Powered by Mas BAsy.
Free Software