Companies paying debt with debt have Fed worried
(NEWSER) - The government's efforts to boost lending, to beat the recession, are inadvertently stimulating a return to wildly risky loans that look sound only if you're wearing rose-colored-glasses. Companies are returning to credit-bubble practices, worrying analysts, including those at the Fed. In one instrument, a "covenant lite" loan, credit is given with virtually no restrictions. Another, the “Pik toggle,” allows debt to repaid with—you got it—more debt. More»
