topleft
topright

Login or Register


Red-Hot Thread

"The corporate brand is not only used to improve competitive positioning and express company aspirations, it can also be a powerful tool to motivate employees."

CFOZone Experts

Opinions and views from expert CFOZone members.

Tag >> unrated bond
Jul 06
2010

Rating agencies increasingly irrelevant

Posted by dbedell in unrated bondS&P 500Dealscredit-rating agenciesCredit Ratingsbrand

dbedell

As companies branch out beyond traditional funding sources, many are considering tapping the unrated bond market. Investors are snapping up deals – enjoying the higher returns from unrated bonds—and companies are starting to recognize that demand. While they may have to pay a premium to make up for the lack of a rating, and the disclosures that go with it, the development could augur less reliance on rating agencies, whose value has been called into question.

A number of deals have gone forward in both the US and in Europe—although more in Europe, which traditionally has a larger unrated market. For example, UK rail company National Express launched a $570 million, 7-year deal in January, which came in with a coupon of 6.25 percent.

Copyright © 2009-2014 CFOZone. All rights reserved. CFOZone is a property of PSN, Inc.