A Rising Mountain Of European Junk

As the euro's day nears, investors scurry for higher yields

Eurojunk has arrived--big time. In the first five months of this year, high-yield debt issues by European corporate borrowers soared to $8.2 billion, surpassing the $6 billion raised in all of 1996. On May 11, the biggest deal yet was announced. The British venture capital groups Cinven and CVC will use a hefty slug of junk to help finance their $1.7 billion buyout of Koninklijke KNP BT, a Dutch packaging company. Final terms have not yet been disclosed, but industry sources are expecting the issue's size to beat the previous Eurojunk record, a $510 million deal in March by NTL, a British telecom company.

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