Moody's: Bond investors need to be vigilant in guarding against "no premium on default" clauses
New York, January 19, 2017-- The removal of "no premium on default" language in bond indentures from Broadcom, General Motors Financial, Fibria and Flex Acquisition Company, Inc. last week won't prevent other issuers from attempting to insert it, Moody's Investors Service says in a new report. And as long as interest rates, and yields, remain low, investors may be willing to accept these terms. "Issuers know a protracted period of low interest rates has left investors more willing to...
Moody's Investors Service is a leading provider of credit ratings, research, and risk analysis. Moody's commitment and expertise contributes to transparent and integrated financial markets, protecting the integrity of credit. Our ratings and analysis track debt covering more than:
- 130 countries
11,000 corporate issuers
21,000 public finance issuers
76,000 structured finance obligations
Credit ratings and research help investors analyze the credit risks associated with fixed-income securities. Such independent credit ratings and research also contribute to efficiencies in fixed-income markets and other obligations, such as insurance policies and derivative transactions, by providing credible and independent assessments of credit risk.
Moody’s default studies validate our predictive ratings. Our published research and investor briefings draw thousands of attendees each year and keep investors current with the rationale underlying our credit opinions.
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