Weaker rating: A Moody’s sign is displayed at the company’s corporate headquarters in New York. Moody’s calculates that almost 36 of US junk-rated companies are rated in B’s lowest level or are already rated C, the riskiest grouping. — Reuters
ONE thing owners of junk bonds are usually sure of is that when the borrower defaults, they will get a veto on cash going to shareholders, to junior debtors or into new deals.
Not any more. Junk bonds financing private-equity firm KKR & Co’s latest buyout subvert the usual order by allowing such payments to go ahead even after a formal default.
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