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Banks Dealt Fresh Blow With Collapse of Brightspeed Debt Sale

  • Underwriters shelve $3.9 billion offering for buyout by Apollo
  • Investors are fleeing risky debt amid recession fears

For the second time in two weeks, Wall Street bankers suffered a painful reminder of how quickly risk appetite is evaporating from credit markets as a $3.9 billion debt sale for a leveraged buyout collapsed.

A group of underwriters led by Bank of America Corp. and Barclays Plc pulled the loan and bond offering for telecom provider Brightspeed on Thursday after struggling to attract demand from investors.