medium · Debt Capital Markets credit-ratings-risk
Why is 'Portability' more common in High-Yield Bonds than in Investment-Grade Bonds?
- Because High-Yield issuers are more likely to be owned by Private Equity sponsors who seek frequent exits.
- Because Investment-Grade bonds, unlike High-Yield, carry no Change of Control covenants at all.
- Because securities regulators forbid any portability feature in bonds rated above the BBB- threshold.
- Because High-Yield investors actively prefer faster ownership turnover and the frequent sponsor exits it enables.
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