The secured bond market - a new trend?

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

However whatever weaker, more leveraged, or less known names, had to ingest a gimmick to stimulate investors. As the confirmatory committed for loans got free 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 hit limited confirmatory committed against them. Nearly 40% of recent stick issuance has been in secured bonds.

The chart beneath shows that such bonds were mostly used as a refinancing agency (instead of capital investments or acquisitions.)



source: composer Reuters


The question ease relic whether this is a long-term trend. It would mean that the leveraged give mart at least in conception is effort replaced with secured bonds. But obligation for leveraged loans also continues to be high, especially as whatever existing inventory is effort paid down. If the give syndication mart recovers, secured bonds haw embellish a temporary phenomenon.


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