medium · Debt Capital Markets primary-issuance-syndication
What is the primary risk to bondholders if an indenture lacks a robust Asset Sale covenant?
- The company might end up paying an excessively high coupon on its outstanding debt
- The rating agencies would categorically refuse to assign any credit rating to the notes
- The company could be barred from issuing fresh equity capital to its new institutional investors
- The company could sell its most profitable divisions and distribute the cash to shareholders
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