Leveraged Finance: Where We Are and How We Got Here
By Edward Ding (Featured image: creative common license) It would be an understatement to say that corporate debt is important. From Coca-Cola toTwitter, corporations are frequent borrowers that use bonds and loans to fund a wide range of difference business activities. Much of this debt financing occurs on the public markets, where investors supply capital in exchange for portions of debt. Leveraged finance, which refers to corporate debt rated at below investment grade (i.e., high-yield debt, “junk bonds”), constitutes a relatively riskier but still vital portion of these markets. By looking deeper into the present state of leveraged finance, we…