Debt deals pulled amid subprime chill

Discussion in 'Wall St. News' started by ASusilovic, Jun 28, 2007.

  1. Companies are pulling financing deals across the globe, in a sign that investors’ worries about rising interest rates and US subprime mortgages are driving up the cost of corporate borrowing. On Wednesday, MISC, the world’s biggest owner of liquefied gas tankers, shelved its $750m bond offering, a day after US Foodservice, the US division of Ahold, the Dutch supermarket group, postponed its $650m bond offering and Arcelor Finance put its euro-denominated benchmark bond issue on ice, citing turbulent market conditions. The bonds and loan deals were pulled after investors rejected proposed terms, demanding higher premiums and more protection. With weak covenants and other risky features, issuers had it coming to them, says Lex. For financial sponsors, however, market mutiny is more ominous.

    Some risk awareness going on, he ?:D