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Mixed year for corporate bond sales
stephen taub

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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.





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