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Poison Puts at Record in Bondholder Defense: Credit Markets

Companies are selling debt that protects bondholders against credit-damaging mergers at a record pace as Blackstone Group LP, Bain Capital LLC and other buyout firms announce takeovers at the fastest rate since 2007.

Forty-five percent of bonds sold in the U.S. and Europe by investment-grade non-financial companies last quarter contained a so-called poison put, compared with 40 percent in the three months ending June, according to data compiled by Bloomberg. Use of the provision, which lets investors sell debt back to the issuer at a premium in an acquisition, has doubled since 2008.