Junk Bonds and the M & A Craze

Merger mania is returning to a higher level now than it was during the days of Michael milliken and junk bonds mania. Of course, many investors got severely burned when large parts of the junk bond market crashed in the late eighties. Now back junk bonds. A hunt for higher and higher bond yields and the risks that may be damned.
already, kkr deal earlier this year to buy up hca (hospitals, etc.) is the largest of the buyout of the company RJ Nabisco. In a deal like that about 20 to 30 percent are raised in the stock market and the rest was grabbed by selling bonds to slab e blago zgibalnik. , And the question is: Who are these high-flying risk investors buy junk bonds at high interest rates, but not only the security plan for the purchase of the company, and perhaps immediately divided up and sold off for profit? We really can not say at this stage except for the usual players: looking to hedge funds in a deal Park money, and profit from the sale; Equity Funds looking to follow suit; pension funds to be able to ride out the deal longer session, and the other usual suspects.
the default rate continues to be somewhat low, but could rise quickly. In 2001, when the technology boom and bust NASDAQ gold, and there was a total failure rate of 10 percent, so it has happened before, and certainly could happen again. Can be a little frightening, because the companies are the same in funding and rising interest rates. Technology start-ups can finance themselves in bonds to higher rates of 17 percent. This is a loan shark to the range. Many restaurants and construction companies pay 10 percent or more. These high interest rates, or interest rates further in the calculation of the overall economy.
this is continuing to accelerate. Another deal more than Thanksgiving Day in 2006, is that Blackstone Group is buying shares of the city Ziel Sam Office property trust for 36 billion dollars. This is certainly a large game with gambling problems in the real estate sector, and the whole issue of effects on white-collar employment sector. With the problems in the automotive sector, machine tools and Gaza utopian fantasies of globalization, is the rocky water ahead. Be making $ 1 an hour workers in Mexico, or $ 1 per day in Bangladesh really substitute for skilled workers in the sector advanced? I do not think so. Adam Heist is a writer for loans site, and there is a new trend called the home loan has been raised considerable turmoil. Our visit today to know why. calico admiral



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