Dividend Deals Most Since 2007 as Loans Heat Up: Credit Markets

Speculative-grade companies are borrowing to finance dividend payments to their private-equity owners at the fastest rate since before the credit crisis, taking advantage of investor demand for high relative yields.

Banks arranged or started marketing $8.77 billion of high- risk, high-yield loans slated for shareholder payouts this quarter, bringing 2010’s total to $17.1 billion, more than five times the amount of the past two years combined, according to Standard & Poor’s Leveraged Commentary and Data.