Risky Borrowers Storm Loan Market for Once ‘Unthinkable’ Savings
- Companies ride refinancing wave to lower interest rates
- 1-800 Contacts, UKG among those that repaid second-lien loans
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Chief financial officers hate second-lien loans. They’re really expensive — about 2 percentage points more, give or take, in annual interest-rate costs than traditional first-lien debt.
Which explains companies’ sudden rush to take advantage of the booming leveraged loan market and issue new first-lien debt — at falling yields, no less — to help pay down the pricier obligations.