Borrowers Try ‘Amend and Extend’ Strategies to Buy Time on Debt
- Vericast, Ineos among recent deals to push out maturities
- Negotiating new loan terms seen more doable than refinancing
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The current environment of ever-rising rates is pushing riskier US borrowers to buy themselves time by putting off looming debt maturities.
Through a variety of tactics, sometimes labeled by market professionals as “amend and extend,” companies are prolonging payment dates rather than try to sell junk-rated refinancing debt at exorbitant yields, or fail to find willing buyers. Demand for new US high-yield debt has fallen this year as investors worry the Federal Reserve’s regime of rate increases will result in a recession.