medium · Debt Capital Markets
Why would a private equity sponsor negotiate for 'portability' in a target company's high-yield bond issuance?
- To lower the initial coupon rate offered to investors at the time of pricing.
- To ensure that the debt is automatically upgraded to investment grade upon a sale.
- To convert the fixed-rate bonds into floating-rate notes upon a change of control.
- To facilitate a future exit by allowing a buyer to take over the debt without triggering a refinancing.
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