Skip to Main Content
Corporate Financial Distress, Restructuring, and Bankruptcy, 4th Edition
book

Corporate Financial Distress, Restructuring, and Bankruptcy, 4th Edition

by Edward I. Altman, Edith Hotchkiss, Wei Wang
March 2019
Intermediate to advanced content levelIntermediate to advanced
368 pages
11h 58m
English
Wiley
Content preview from Corporate Financial Distress, Restructuring, and Bankruptcy, 4th Edition

CHAPTER 2An Introduction to Leveraged Finance

The leveraged loan markets and high‐yield bond markets play a critical role in helping finance speculative‐grade borrowers. These debt contracts have a variety of special features that make them unique in the financial markets. They are key to the restructuring of distressed firms because leveraged structures are more likely to become distressed than nonleveraged structures. Investment banks, hedge funds, and private equity funds (PEs) pay close attention to this special segment of the financial markets.

Both the leveraged loan markets and high‐yield bond markets in the United States have experienced fast growth since the end of the 2008–2009 financial crisis. Both markets experienced a record amount of new issuance in 2013 – over $600 billion of leveraged loans and over $330 billion of high‐yield bonds issued in total (based on data from Standard & Poor's Leveraged Commentary & Data (S&P LCD) and SIFMA). Total issuance in both markets declined shortly after 2013, when concerns about deteriorated underwriting standards led the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency to issue new leveraged lending guidelines.1 By 2017, however, issuance had returned to the peak level reached earlier ($651 billion in leveraged loan issuance and $284 in high‐yield bond issuance).

In this chapter, we provide a brief introduction to these two major instruments for speculative‐grade ...

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

Corporate Finance Theory and Practice, Third Edition

Corporate Finance Theory and Practice, Third Edition

Pascal Quiry, Maurizio Dallocchio, Yann Le Fur, Antonio Salvi
Corporate Finance, 5th Edition

Corporate Finance, 5th Edition

Pierre Vernimmen, Pascal Quiry, Maurizio Dallocchio, Yann Le Fur, Antonio Salvi
Corporate Finance: A Practical Approach, Second Edition

Corporate Finance: A Practical Approach, Second Edition

CFA Michelle R. Clayman, CFA Martin S. Fridson, CFA George H. Troughton

Publisher Resources

ISBN: 9781119481805Purchase book