Creditor Battles Are Hobbling Risky Debt: Credit Weekly
- Junk-bond recoveries over past year are at 33%, JPMorgan says
- Liability management transactions contribute to hefty losses
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Bond investors are fighting Incora, an aerospace parts supplier, as it tries to emerge from bankruptcy, and their battle illustrates why high-yield debt investors have been suffering such significant losses in this credit cycle.
Money managers including JPMorgan Chase & Co. and affiliates of asset manager BlackRock Inc. are trying to undo a rescue financing that Incora completed in 2022 that left them and other investors worse off. Over the last few years, companies that have run into trouble have been more aggressive about getting emergency funding from a handful of their money managers, while hurting their other creditors in the process.