Swiber debacle: Lessons for bond issue managers and bond investors
I DISAGREE with some of the opinions expressed in the article, "Swiber troubles show urgency needed in fixing debt, adviser says" (BT, Aug 10).
Rather, the Swiber debacle brings forth certain lessons that managers of bond issues and bondholders would do well to heed.
In the prevailing low interest rate environment, investors are desperate for yield and high-yield bonds seem to be the answer. Unfortunately, some of these investors may be oblivious to the risks involved. We see companies that, in the past, would not have been candidates for the bond markets, having their recent issues oversubscribed by multiple times. (See, for instance : "Bonds pip equities in fundraising by firms as investors chase yield" (BT, June 13, 2016).)
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