|
I don't know of any
in danger but some had definitely had trouble with interim financing becoming permanent since they can't sell near par due to increase in the risk premium now required. Bonds becoming junk would increase the yield for a buyer who will demand a greater discount, but not the holder, but as long as they continued to pay, the holder would not realize a loss. Some institutions are required to carry only investment grade and would be forced to sell though. An interest rate decrease will help the company make its payments in the future and will make its bonds more attractive, but only if the decrease is larger than increase due to the rise in risk premium, that is, only if it is a decrease for that bond. The yield may increase but it may or may not increase by as much as it previously decreased. If the yield increased sufficiently, they should be able to sell them, assuming they can find able and willing buyers. If they can't, the yield hasn't increased sufficiently.
|
Linear Mode
