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Rising Shareholder Activism Threatens Creditors, Debt Repayment: Moody's

Bond investors face growing risk as activist shareholders are targeting more companies in 2015 than last year, threatening further damage to corporate credit quality, according to Moody’s Investors Service.

Activists who seize stakes to effect changes to corporate behavior targeted 26 percent more North American companies during the first three months of this year than in the same period last year, the New York-based ratings company said in an April 7 report. The number of targets will probably increase at the expense of lenders who miss out when activists raise cash for their own purposes because it reduces the amount available for debt repayment.