Wed 12/21/2022 05:26 AM
Against the backdrop of a rising rate environment, many European leveraged loans are now priced at a discount.
During the global financial crisis of 2008/9 when loans were also trading at sub-par prices, a number of healthy borrowers took advantage by buying back their own loans below par, allowing them to deleverage cheaply and build equity value at a discount.
However, loan buybacks then were not without controversy. Leveraged loan documents at the time did not cater expressly for debt
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