Friday, August 3, 2007

Corporate Bond Risk Rises After Bear Stearns Rating Outlook Cut by S&P

(Bloomberg) -- The risk of owning corporate bonds
rose in the U.S. and Europe after Bear Stearns Cos., the manager
of two hedge funds that collapsed last month, had its debt-
rating outlook cut to negative by Standard & Poor's.

The failure of the Bear Stearns funds, which invested in
subprime mortgage-related bonds, triggered a flight from the
riskiest debt that spurred some lenders to balk at financing
leveraged buyouts. Deutsche Bank AG, JPMorgan and six more banks
today canceled the sale of 1 billion pounds ($2 billion) of
loans for Kohlberg Kravis Roberts & Co.'s LBO of U.K. drugstore
chain Alliance Boots Plc after failing to find investors, two
people with direct knowledge of the deal said.


Read more at Bloomberg Bonds News

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