Deals
Two Years After Chinese Buyout, Lexmark Bonds Show Junk Risk
- Lexmark’s bonds dropped almost 40 percent in just a few days
- Poor earnings, limited disclosures are said to be behind drop
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When dealing with the riskiest companies in the debt market, please make sure to mind the gap between perception and reality.
That’s a lesson bondholders of Lexmark International Inc. have learned over the last month as their holdings tanked almost 40 percent -- going from a safe credit bet to distressed virtually overnight after an earnings report. The selloff in the $341 million of bonds was accompanied by severe credit ratings cuts that pushed the supplier of printers and office supplies into the bottom end of the scale.