A little more than a year ago, the chemical company Lyondell declared bankruptcy. Last week, in an effort to get out of bankruptcy, Lyondell raised $2.7 billion in what Forbes's Matthew Craft describes as "one of the largest junk-bond deals this year." The sale also included a $500 million loan with "weak terms" known as "covenant lite."
"Cov-lite" loans were a big part of buyouts pre 2007. And their possible return is a reason for worry, say Marketplace's Paddy Hirsch. He explains cov-lite loans, and the danger they present, in this Whiteboard video:
Cov-lite loans are back! from Marketplace on Vimeo.
Posted
03-30-2010 9:50 AM
by
Graham Griffith